Mr. Salim, the head auditor of E& X Consultancies, audited the company balance sheet of Galfar Car Company located in Al Khuwair, Muscat Oman as of December 31 2010 & 2011 and the following are the accounts audited: statement of income, retained earnings; and cash flow for the past two years then ended December 31st, 2011. During a meeting with his team, which was attended by 4 auditors he said that “our main goal is to provide a clear competitive statement of the accounts submitted by Galfar Car Company, we have to express an opinion on this financial statement based on our audit, we should conduct our audit in accordance with the audit standards generally accepted in the U.K. those standards required that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement”. Each member of the team was given task and they provided the findings of declined their net income for December 2011 mainly because of (1) incurred more expenses on shipping cost due to improper scheduling of orders, they don’t use EOQ ( economic order quantity), (2) commissions of the agents are very high compared to the existing rates given by other car dealer showing lack of benchmarking with other companies. The audit recognized ISO number is : 000452- 93786492, with company audit number: 07- 04.

Prepare the complete audit report with corresponding recommendations on the above findings cited in the case.