Q$1.$ Analytical Procedures

Below is the financial information of Ale Company which buys and sells smart clothes:

The following information has been obtained from the CFO of Ale Company:

The company closed several of its stores during the year.

The industry's net profit margin has decreased due to higher expenses, such as an increase in

freight charges.

As the global economy shifts towards remote work, the demand for smart clothing is likely to

decrease.

Global competition is expected to intensify as more customers seek the best deals online.

You have also been provided with the following information regarding the industry:

Requirements

$($a$)$ Evaluate the explanation provided by the CFO. Provide calculations to support your conclusions.

$($b$)$ Given the available information, what additional audit procedures would you conduct?