page 2 Question 1 - 15 marks Harry Kane Chartered Accountants (Harry Kane) and O'Giroud Manufacturing plc (O'Giroud) just signed their first audit engagement letter. You are the Audit Manager responsible for audit of O'Giroud's Financial Statements for the year ended December 31, 2020. In addition to the extract of the Financial Statements below, O'Giroud has Profit before Tax of $30,000,000 (2019 - $31,000,000). O'Giroud Manufacturing plc Financial Statements (Extract) Year Ended December 31, 2020 Balance 2020 ($) 2019 ($) Cash 1,500,000 2,000,000 Inventory 1,900,000 900,000 1,000,000 990,000 Payables Receivables 800,000 810,000 Property, Plant & Equipment Loans Payroll Expenses 150,000,000 12,000,000 100,000,000 10,000,000 4,900,000 6,500,000 1) a) Which balances would you consider to be significant to this year's audit, based on the following, I. Materiality for Planning Purposes (3 marks) II. Analytical Procedures used at the Planning Stage (4 marks) Note: Do show all workings in justifying your answer. 1) b) For two (2) significant balances identified in part (a) explain four (4) substantive audit procedures for each? (8 marks)