Exhibit 1 - Email from audit engagement partner To: Audit manager From: Stella Cross, Audit engagement partner for Redback Sports Co Subject: Audit planning for Redback Sports Co, and evaluation of accepting Emu Gyms Co as a potential audit client Hello I have provided you with some information in the form of a number of exhibits which you should use to help you with planning the audit of Redback Sports Co for the financial year ending 28 February 20X9. Using the information provided in Exhibits 2 and 3, I require you to prepare briefing notes for my own use, in which you: (a) Evaluate the business risks to be considered in planning the company's audit. (8 marks) (b) Evaluate the risks of material misstatement to be considered in developing the audit strategy and audit plan. (18 marks) (c) Design the principal audit procedures to be used in the audit of the grant received from the government in September 20X8. (6 marks) In Exhibit 4, I have also provided you with some information relating to Emu Gyms Co. In respect of this, in your briefing notes you should also: (d) Evaluate the matters to be considered in deciding whether to accept an engagement to provide Emu Gyms Co with an audit or limited assurance review. (8 marks) (e) In relation to the suspicion of fraud being carried out at Emu Gyms Co: Discuss whether an audit or limited assurance review of financial statements in previous years could have uncovered the fraud. Thank you. (6 marks)