Mrs Meyer is a director of an international firm of external auditors and works in the Auckland office. Mrs Meyer is the engagement partner on the audit of CountSave Foods Ltd, a company listed on the NZX. The audit team completed the audit for the year ended 31 March2020 and the audit senior prepared the following draft audit report.

Auditor's report

CountSave Foods Ltd

Opinion

We have audited the financial statements set out on pages 12 - 40, which comprise the statement of financial position as at 31 March 2020, and the statement of profit or loss for the year and glanced through the cash flow statement then ended and the notes to the financial statements.

In our opinion, except for the possible effect of the matter described in our report, the financial statements present fairly, in all material respects the financial position of CountSave Foods Ltd as at 31 March 2020, and its financial performance and cash flows for the year then ended in accordance with the International Financial Reporting Standards

Other information

The other information comprises the Director's report as required under the NZ Companies Act In connection with our audit of the financial statements, if based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact.

Basis for opinion

Included in accounts payable is an amount of $15 million. The company did not have adequate controls to maintain records of accounts payable for goods and services received but not paid. We are unable to obtain sufficient and appropriate audit evidence to substantiate the accruals disclosed in note 28 to the financial statements. As a result, we are unable to determine whether any adjustments were required to the financial statements arising from the accounts payable and accruals not brought to account or incorrectly stated

We conducted our audit in accordance with the international Standards of Auditing (IASs). We are independent of the company in accordance with the Independent Regulatory Board for Auditors Code of Conduct of the USA . We believe that the audit evidence we have obtained provide a basis for our opinion.

The financial statements.

The director's ae responsible for the preparation and fair presentation of the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern.

The audit of the financial statements

My objectives are to obtain assurance about whether the financial statements as a whole are free from material misstatements, whether due to fraud or error, and to issue an auditor's report. Reasonable assurance is a high level of assurance, a guarantee that an audit conducted in accordance with ISA will always detect a material misstatement when it exists.

As part of an audit in accordance with ISAs we:

Identify and assess the risks of material misstatements of the financial statements, design and perform audit procedures , and obtain audit evidence to provide a basis for our opinion the risk of not detecting a material misstatement resulting from fraud is more than one resulting from error as fraud may involve collusion, forgery intentional omissionsand misrepresentations.

Obtain an understanding of the internal control in order to design audit procedures that are appropriate in the circumstances

Evaluate the appropriateness of accounting policies used and the reasonableness of related disclosures by management

Conclude on the appropriateness of the director's use if the going concern basis of accounting. Which in this case we report have raised our concerns because of the large debtor, which has gone into liquidation after financial year-end, but before we issued our statement.

Evaluated the overall presentation, structure and content of the financial statements including the disclosures, and whether the financial statements represent the underlying transactions and events. We have found one significant error , luckily it can be traced only to the value ofa long term investment and is not pervasive

We have made recommendations to the directors as to how controls in the company can be improved and expect to see them implemented by the interim audit.

We communicate with the directors regarding among other matters, the planned scope and timing of the audit and other matters that we identify in our audit. In view of the recent Covid situation we decided to verify the actual inventory byflying drones over the inventory as we could not enter the client's premises.

We would like to offer you a discount on our audit fees as we are very concerned about the effect of Covid 19 and would not like tolose you as a client. Your attention to this matter that is important as we will not be able to offer this discount for long.

Management has also drawn our attention to the fact that you have asked questions about the fact that Jack Meyerhas been on the audit for 8 years now and it might be time to rotate him. We wish to take the opportunity to explain to you that Jack is the best in the business and you would have to search wide and far to find his equivalent. To further clarify, as we have recently incorporated with our international partners in the UK, we do not need to be registered auditors in New Zealand.

Attest

Registered auditors

2 February 2020

Required

Evaluate the draft auditors report for its compliance with the relevant NZ Audit Standard(s).

a) Provide all the changes you think should be made by downloading a copy of the word document inserting any changes you regard as applicable in a different font and font size. (That is do not use (Calibri font size 11 for your changes only)

b) For every error that you find please, refer to the relevant paragraph and NZ standard, after the correction that you made.