Laurel Limited was incorporated on 1 January 2020. You have been given the following statement and been asked by your team leader to assist the junior members of the audit team.

Revenue Less: Operating expenses Add: Other income Less: Finance costs Profit before tax Tax for the year Profit for the year Notes to the Financial Statements 1 Revenue Revenue consists of rent revenue and commission revenue 2 Operating Expenses Operating expenses include: Directors' emoluments Leasing charges Audit fees Laurel Limited Statement of Profit or Loss for the Year Ended 31 December 2020 3 Other Income Profit on sale of land and buildings 4 Finance Costs Interest on overdraft Notes 1 2 3 34 R 303 750 137 500 25 000 5 000 196 250 49 875 146 375 R 75 000 30 000 12 000 30 000 5 000 7.1 The auditor has a duty to gather evidence to support the audit opinion. Audit evidence needs to meet certain criteria. Explain what the criteria are. 7.2 Which assertions need to be tested on the statement given in the scenario? 7.3 Explain how you would go about testing revenue in the statement.