Each client's portfolio is stored and administered on a secure, centralised system. A Personal Portfolio Administrator is appointed for each client. Cougar's services give its clients financial peace of mind on -their life's journey and include: - Portfolio Administration - Personal Financial Planning - Investments \& Savings Strategies - Retirement Planning - Personal Risk Management - Will and Estate Planning - Tax Planning - Business Protection and Planning - Employee Benefits One of the Directors (Mr. Adams) of Kiner has a 25\% shareholding in Cougar. Mr. Adams is a very close friend of one of the founding members of Cougar. Analytical Procedures The audit team will make use of analytical procedures to assist in identifying and assessing the risks of material misstatement. The following information pertains to Cougar: - There is an annual budget which is divided by months. - The accounting department maintains detailed records. Accurate and reasonably detailed monthly accounts are prepared. - Cougar employs a small number of permanent administration staff as well as temporary staff during holidays for students doing vacation work. You as the Audit Senior have little experience in complex computerised audit environments and believe that adopting a strategy of auditing around the computer is perfectly adequate. During the planning meeting, the Financial Manager informed you that Cougar requires the audited financial statements four weeks after the year-end. 1.1 Briefly mention the general considerations that the engagement partner should take into account when considering the competence and capabilities of the engagement team in terms of ISA 220. (5 marks) 1.2 Discuss any factors that the partner in charge of the audit of Cougar Ltd did not, but should have considered before accepting the audit. Conclude your answer by stating whether the audit of Cougar Ltd should have been accepted or not by Kiner. (20 marks) 1.3 Discuss the general analytical procedures that you will conduct at the planning stage of the audit based on the information provided for Cougar Financial Services Ltd. Upon completion of your Post Graduate degree in Accounting, you commenced with your articles at Kiner Incorporated ("Kiner") 3 years ago. At the beginning of the current year, you were promoted to Audit Senior. Kiner has 4 Audit Partners and 15 professional staff members. Their services include Audits and Assurance, Tax, and Accounting. Kiner is located in Stellenbosch. You were assigned to a new audit client named Cougar Financial Services Ltd ("Cougar"). Cougar is a registered VAT vendor. The previous auditors resigned due to disputes with the management of Cougar regarding the correct application and disclosure of revenue. The Directors informed you that they changed auditors because their previous auditors held a different view on which accounting policies were appropriate. Cougar refuses to elaborate on the matter further. The previous auditors also did not want to comment on this statement as the Directors of Cougar did not give them permission to discuss Cougar's affairs. This will be the first time Kiner audits a client in the financial services industry. Background Information Cougar is an authorised financial services provider, dedicated to protecting and increasing the wealth of South Africans at every stage of their lives. Cougar is independent and aligned with leading financial business partners and able to offer a comprehensive portfolio of financial solutions that fit the unique profile of their individual and business clients. Cougar has three branches, two in the Western Cape and one in Johannesburg. and has shown rapid financial and operational growth in the past three years. Cougar has a fully integrated computerised financial accounting and management reporting system which was developed in-house several years ago. The system was developed in-house to accommodate the unique features pertaining to the company's business model and financial reporting system. Most of the data processing takes place at the IT centre and the branch in Johannesburg