Question $1$

You are a manager in the audit firm of Alastair Brothers, in charge of the audit of Visuals Ltd$,$ which provides various financial services including pension and investment advice and cash forecasting for medium sized businesses. The company reported a net financial loss for the last quarter of $2022.$ This was due to the write$-$off of a fraud related expense. The directors of the company are concerned that there is a possibility of frauds having occurred in prior quarters that have gone undetected and have requested your help in identifying any such frauds as part of your audit for the year ended $31$ December $2022.$

Visuals Ltd has been an audit client of your firm for the last nine years, and is currently your firm's most valued client. Alastair Brothers provides, in addition to audit services, management consultancy and taxation advice to the company.

The Audit team assigned for this year's financial statement audit is the same as it has been for the last three years, including the Senior Partner, Joseph Alastair, who has been the partner since Visuals Ltd first became a client of the firm.

You have also been notified that the directors of Visuals Ltd have invited you and the Senior Partner to the company's country house, to attend a weekend gala they are sponsoring and to which their customers and business associates have been invited.

Required:

a$)$ Briefly explain the statutory duties of the external auditor.

$(5$ marks$)$

b$)$ Explain to the directors, the responsibilities of the external auditors with regard to the detection and reporting of fraud in accordance with the International Standards on Auditing.

$(8$ marks$)$