New Ltd is a company that manufactures a range of products for the electronics industry. You work for a medium-sized firm of accountants, Burberry Partners (Burberry). It is now 29 May 2021 and you have been approached by William Salter, one of the directors of New Ltd, to perform the financial report audit for the year ended 30 June 2021.

After having a brief conversation with William, you establish the following:

• New Ltd was set up by William and his cousin Michael Sunday, who are both directors and each own 50% of the shares.

• Both William and Michael consider themselves to be entrepreneurs and have a range of experience in different industries. Since forming New Ltd six years ago, the profits have increased very rapidly, and sales have nearly doubled each year.

• William mentions that they left their previous two auditors due to differences of opinion about accounting policies and accounting treatments for various transactions including research and development expenditures.

• Your firm has wide experience of the industry but no previous connection to the company. You have explained to William that there are certain procedures that need to be followed before Burberry can accept appointment as auditor for New Ltd.

• William has indicated that New Ltd is seeking additional financing and would like the audit to be completed as soon as possible so that the audited financial report can be provided to the potential financiers and prevent any delay in accessing additional funds.

Required:

Based on the above information, list FIVEissuesthat your firm (Burberry Partners) should consider before accepting the appointment as the auditor of New Ltd. (5*1= 5 marks)