CASE 9 Healthcare Bhd is a listed pharmaceutical company. Its principal activities are producing medical and beauty-based products. Below is an extract from the statement of profit or Joss and the statement of financial position for the last two financial years of the company. 31 Dec 2016 31 Dec 2017 (MYR '000) (MYR '000) Statement of profit or loss extract Revenue 37,410 31,820 Cost of sales (17,600) (21,265) Gross profit 19,810 10,555 Operating expenses Administration (6,175) (6,600) Selling and distribution (4,905) (3,445) Interest payable (505) (525) Investment income 725 Profit/(loss) before tax 8,950 (15) Statement of financial position extract Cash and bank 1,265 (4,750) Account receivables 11,700 10,000 Additional information: (i) Sales are made to companies, with income being in the form of cash and credits. Credit sales are given to trusted customers with a term of n/60. The current year accounts receivable includes a long overdue balance of MYR 1,700 which is outstanding more than a year. However, the company does not record any allowance for doubtful accounts. (ii) All items sold are delivered to the customer using Healthcare Bhd's own delivery vans. The directors of Healthcare Bhd indicate that the company has had a difficult year, but are pleased to present some acceptable results to the members. Required: (a) As part of your risk assessment procedures for Healthcare Bhd, identify and provide a possible explanation for the unusual changes in the income statement. (b) Confirmation of the end-of-year bank and account receivables balances are important audit procedures. Discuss the audit objectives pertaining to the procedures