Financial Performance

The senior auditor (Nalin) conducted analytical review procedures during the planning stage of the audit. The results of the review are noted below:

The financial performance of ABC Investment for the Financial Year ending 30 June 2021 is at the upper end of what the market has predicted. The earnings per share is consistent with the forecasts of all current analysts. In addition, all key financial performance indicators such as profitability, liquidity and debts are favourable compared to the company's major competitors.

Below are the highlights of the Company's current year financial performance:

Revenue increased by 5% compared to last year.

Accounts receivable increased 18% relative to last year.

Earnings before tax increased by 6% since last year.

Cash and cash equivalents increased 11%.

Profitability and liquidity ratios remained relatively favourable and stable.

Funds under management (FUM) grew 20% since last year.

Advertising expense decreased by 50% since last year.

How auditor can use above information to work out his audit work ?