CASE 5

Rahim, a senior auditor in-charge is called upon to audit a client, Mitsi Motors, which manufactures and supplies automobile parts all over the country. During the financial year 30 June 2017, the company had expanded its operations by opening new sites in a few strategic locations across the country. Mid-January 2017, the management appointed an experienced charted certified accountant to set up an internal audit department. However, by April 2017, the company reported a negative cash flow for the year with sales going down in one of its sites due to the fierce competition in the automobile industry and with the slow economic development in the country. An extensive range of spare parts is held, for which perpetual inventory records are kept, but no continuous checking is conducted by the storekeeper. Meanwhile, car servicing and body repairs are carried out in workshops by employed and sub-contracted service engineers where most jobs are started and finished in a day, but the invoices are not immediately prepared upon completion. In the last financial year end, the company had also faced a change in the management with the resignation of the company's CEO, Mr Tamatsu Honsi.

Required:

Explain the information that would be required in order to perform analytical procedures during the planning of the audit.