Question 13 (22 marks) Danny is planning the audit of the account receivables for ABC Company. Danny has assessed the following risks as low, medium, or high for the relevant balance- related assertions in the account receivables. Balance- Audit Risk Inherent Control Detection Related Risk Risk Risk Assertions Existence Medium Medium Medium Rights and Medium Medium Low obligations Completeness Medium Low Medium Accuracy and Low High Medium (iv) Valuation Classification Medium Low Low (v) Required: a. Define each of the FOUR identified risks in the columns of the table above. (8 marks) b. List out the answers (i) to (v) in the table above regarding detection risk for each balance-related assertions using the terms low, medium, or high. (10 marks) c. Which audit objective (assertion) require the greatest amount of evidence and which require the least? (4 marks) Question 14 (8 marks) It is at the interest of both the client and the auditor that the auditor sends an engagement letter, preferably before the commencement of the engagement. a. Explain THREE purposes of sending an engagement letter to the clients. (6 marks) b. List FOUR principal contents of an audit engagement letter. (2 marks)