Mr. Staties, the Senior Manager in the Independent Review Department, is regarded as the go to person and analyses the results when performing analytical procedures when executing the reviews. The reason for his status in the Department is because of his qualifications obtained in statistics and data analytics. His general rule of thumb when performing analytical reviews is that "where there is smoke there's fire - when analytical procedures indicate risk there is a high probability that a qualified opinion will be expressed".

Required:

(a) Discuss what is implied when the independent reviewer states that the financial statements should not be materially misstated.

(b) Discuss whether the independent reviewer can express a qualified opinion if the results of the analytical procedures indicate that there are significant risks in the presentation of the financial statements.

(c) Discuss the procedures that the independent reviewer should perform before accepting the financial statements of the company which were independently compiled.