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You are an audit management at J&W LLP. Your firm are providing audit engagement for Alpha Lid, a manufacturing company (the Company) for the year end 31 December 20x0. a. Whenperforming risk assessment in planning for the audit, you discovered that: In December 20x0, the Alpha placed orders for two new machines which will be used for production. estimated total cost of those machines is S15m and the company is not sure whether they will be received by the year end

The Company has spent an estimated $1 2m on refurbishing their existing plants. b Receivables at year end date is $4.2 million which is significantly higher as compared 10 balance of $2.2m in last year. You are required to perform substantive procedures in respect of Alpha's

receivables balance. C. The Receivable balances of Alpha at 31 December 20X0 included a debt of $50,000 duc from customer A that went to bankruptcy in March 20X1. The Director of Alpha refuse to make any adjustment with regard to this debt to financial statement as at 31 December 20x0 as the customer did not enter liquidation until after the year end. Alpha's drat financial statement shows a pre-tax profit of S600,000

Required:

a.Identify and explain audit risks associated to the information (a) and propose audit response to each risk. (15marks) (0)

b.Describe audit substantive procedures you would perform in relation to receivables of Alpha Ltd. (Where possible you should perform the procedures that you describe based on the information (b) provided) (15marks)

c.Discuss the issuegiven in (c), including an assessment of whether it is material; and describe the impact of the audit report if the issue remains unresolved in this case.(10marks). (iii)

Your firm are providing audit engagement for Alpha Lid, a manufacturing company (the Company) for the year end 31 December 20x0.

a. Whenperforming risk assessment in planning for the audit, you discovered that: In December 20x0, the Alpha placed orders for two new machines which will be used for production. estimated total cost of those machines is S15m and the company is not sure whether they will be received by the year end The Company has spent an estimated $1 2m on refurbishing their existing plants.

b. Receivables at year end date is $4.2 million which is significantly higher as compared 10 balance of $2.2m in last year. You are required to perform substantive procedures in respect of Alpha's receivables balance. C. The Receivable balances of Alpha at 31 December 20X0 included a debt of $50,000 duc from customer A that went to bankruptcy in March 20X1. The Director of Alpha refuse to make any adjustment with regard to this debt to financial statement as at 31 December 20x0 as the customer did not enter liquidation until after the year end. Alpha's drat financial statement shows a pre-tax profit of S600,000

Required:

1.Identify and explain audit risks associated to the information (a) and propose audit response to each risk. (15marks) (0)

2.Describe audit substantive procedures you would perform in relation to receivables of Alpha Ltd. (Where possible you should perform the procedures that you describe based on the information (b) provided) (15marks)

3.Discuss the issuegiven in (c), including an assessment of whether it is material; and describe the impact of the audit report if the issue remains unresolved in this case.(10marks). (iii)