For each of the following factors, identify the potential misstatement it may give rise to in the financial statement, and identify the area the auditor will need to focus on as well as the specific audit procedure to use in order to identify the potential misstatement.

a. The board of directors approved new contracts for senior management which requires them to meet certain financial benchmarks before they are entitled to pay rises

b. The bank accounts have not been reconciled in over six months (6 marks)