Indah Bus Tours (IBT) is a registered company that offers premium coach tours around Kuala Lumpur. Your firm has recently been appointed auditor for IBT. You as audit senior are now preparing an overall audit strategy, with one of its principal sections being an overview of IBTs business and the tourism industry. Required:

(a) According to ISA 220 - Quality Control for an Audit of Financial Statements, the auditor should consider certain factors before accepting a new engagement or continuing an existing engagement. Discuss THREE (3) such factors. (6 marks)

(c) As per ISA 320 - Materiality in Planning and Performing an Audit, briefly set out the following: What constitutes a material misstatement? How the auditor might calculate materiality?