Petlover Berhad (Petlover) which has a financial year ending 31 March is one of your firm, Katie and Partners' (Katie) new client. Petlover manufactures and sells a range of pet food. You and your team are preparing to start the final audit for the year ended 31 March 2021. The draft financial statements of Petlover show total assets of RM198.4 million and the profit before tax of RM46.2 million. In December 2020, Petlover launched a new brand of vegan pet food for cats. The sales of this new product were very much lower than expected and the directors are considering selling the product at a discounted price. The new products with a cost of RM4.8 million were included as finished goods in the inventory at the year end 31 March 2021. Elina Berhad (Elina) is one of the major customers of Petlover who operates a chain of pet stores across the country. For the past several months it is reported in the press that the sales and profits of Elina have been dropping and during March 2021 Elina announced that it plans to close half of its stores in May 2021. In trade receivables of Petlover an amount of RM 5.2 million due from Elina is included. However, Petlover has not provided any allowance for doubtful debts the year ended 31 March 2021. Petlover had received legal claim from customers worth RM3.8m by 31 March 2021, due to a batch of canned pet food dispatched in November 2020 to more than 200 retail stores had been contaminated with insecticide. The legal claim is made by customers whose pets had eaten this contaminated canned pet food. All these claims received as been reported appropriately in the financial statement. However, the lawyer of Petlover informed you that there might be a significant amount of additional legal claims made by customers in future due to the contamination. Your firm feels that this matter is a contingent liability that needs disclosure but have not decided on the adequacy of these disclosure. The directors of Petlover have also agreed to disclose some detail of the potential claims in the financial statements. Required: (a) Illustrate any FIVE (5) procedures the auditor should undertake to confirm opening balances for a new audit engagement. (5 marks) (b) Evaluate the impact on the audit report if the auditor is unable to confirm the opening balances, or if the opening balances contain misstatements. (2 marks) (c) Identify and explain FOUR (4) financial statement assertions relevant to account balances at the year end. Describe a substantive procedure relevant to the audit of Petlover Berhads year-end inventory for each of the assertion identified. (8 marks) (d) Develop the substantive procedures the auditor should perform to obtain sufficient and appropriate audit evidence in relation to the trade receivable balance due from Elina Berhad. (5 marks) (e) Discuss the issue and describe the impact on the auditor's report of Petlover Berhad of both adequate and inadequate disclosure of the contingent liability. (5 marks) [Total : 25 Marks]