CASE STUDY

You are a part of the team responsible for planning the Land & Homes Group (ASX code - LHM), a property development company, audit engagement for 2020. You are required to gather relevant background information and make a report for a meeting with your audit seniors. Assume that this is the first time that the audit will be conducted by your audit firm for this client.

QUESTION:

1) Are there any events or conditions that may cast significant doubt on the LHM's ability to continue as a going concern? Explain. Your answer should be supported by at least three factors.

2) Identify an appropriate base and set planning materiality for LHM. Explain why you have chosen this base and the percentage you have used.