Question 1 You are a senior auditor in Bikuli 8: Co.. Certified Public Accountants. The audit firm is charged with the audit of Worldover Cargo Systems Limited's (WCSL) financial statements for the year ended 31 December. 2020. WCSL is a clearing and forwarding company located in Nakawa, Kampala, handling both import and export consignments. The company prepares financial statements that comply with the International Financial Reporting Standards (lFRSs) and the Companies Act. 2012. WCSL is in the final stages of getting listed at the Uganda Securities Exchange (USE) hence requiring the most recent audited financial statements. The final audit for the year ended 31 December 2020 is nearing completion. and the audit engagement partner. CPA Fred Kassami, has sent you an email below: Helio. Hope you are doing well. Below are the matters I discussed with WCSL's Finance Director. Mr. Pamij Patel, for your review: 1. Financial ratio analysis: WCSL's management requested us to compute financial ratios to guide them in making investment decisions. The selected financial ratios computed by the audit engagement team were as follows: Ratio 2020 2019 Current ratio (times) 1.16 1.05 Operating margin (\"2%) 15 8 Trade receivables (days) 35 30 Debt: equity (%) 60 35 Return on capital employed {%) 10 12 I also find the same financial ratios relevant in performing analytical procedures on both financial and non-financial data to identify fluctuations or relationships. You may also help the audit engagement team to use other types of analytical procedures. 2. investment property: WCSL owns a bonded warehouse that was previously used to keep clients' cargo pending customs inspection and clearance. The property is located in Kasokoso, Bweyogerere. At the start of the year, the warehouse was let out to Kampala traders. It is WCSL's policy to measure all investment property using fair value model. As at 31 December 2020, the warehouse was valued at Shs 2.2 billion. Management is not sure on the proper accounting treatment and the audit engagement team has also referred the matter to you for guidance. 3. Pending court case: During the year. WCSL was sued by a customer in Nakawa High Court for damaging his container that had computers and other accessories. Information from Kabs & Co. Advocates (WCSL's lawyers) indicates that a claim of Shs 146 million has been made against WCSL. Management has argued that since this matter is immaterial, there is no need of either disclosing or making a provision for it. 4. Property, plant and equipment (PPE): It is WCSL's policy to use the cost model when measuring all its PPE. The residual value and the useful life of each individual asset is reviewed at each financial year end, and a number of accounting estimates and judgments have been provided in the management accounts. Please consider all the above as key audit matters. Your timely response and professional iudgment will be key in forming an audit opinion on WCSL's financial statements. Regards. CPA Fred Kassami Required: In your response to CPA Fred Kassami's email: (a) Discuss the: (i) other types of analytical procedures the audit engagement team may have used other than the financial ratios computed. (4 marks) (ii) matters documented in the working papers regarding the analytical procedures performed