Question 2 After the anti-corruption unit in the President's office raided the finance department of Makoli District Local Government, the office of the Auditor General has appointed MXL & Associates, Certified Public Accountants, to carry out forensic and value for money audits into the alleged complaints of corruption and misuse of public funds by the district officials. The audit opinion will be used for litigation purposes if any charges are preferred against the officials. During the audit planning meeting, the managing partner appointed you to be part of the audit team that will examine the books of accounts of Makoli District from 2017 to 2019. The scope of work will involve examining the government and donor funded projects to ensure that the funds were optimally utilised. Required: (a) in your draft working papers. explain the matters you will cover under; (i) ferensic audits. (3 marks) (ii) value for money audits. (3 marks) (b) Discuss the; (i) reasons for carrying out public sector audits like that at Makoli district. (6 marks) (ii) auditing postulates relevant to MXL 8r. Associates in performing a successful audit engagement at Makoli district. (3 marks) (Total 20 marks) Question 3 The Managing Partner Winy & 00., Certified Public Accountants. has received a telephone call from the finance director, Dawa Pharmaceuticals Ltd (DPL) in relation to a new audit engagement for the year ended 30 September 2019. This followed a disagreement with the previous auditors for not submitting the audit reports in time. DPL imports and exports pharmaceutical products and hospital equipment. In his briefing notes to you, the Managing Partner has informed you that DPL needs an engagement letter to define the nature and scape of the audit engagement. Upon this appointment. Winy a Go. needs to establish an overall audit strategy to finish the audit engagement in three weeks' time. The managing partner has asked for your input to address the above issues. Question 1 You work as an audit clerk at Lutu & Partners, Certified Public Accountants. The audit firm has been re-appointed as external auditors for Riki Bottling Company Limited (RBCL). RBCL is a soft drinks company located in Seeta. Mukono district. The company prepares financial statements that comply with the International Financial Reporting Standards. As part of the audit planning preparations. you received an email from the audit senior regarding the audit of RBCL's financial statements for the year ended 31 March 2020. The excerpts of the email read as follows: Use analytical procedures to identify fluctuations or relationships that may exist. There is suspicion that sales revenue is materially misstated thus the use of financial ratios will help to minimise the risks to an acceptably low level. Inquire from management any other matters that may assist us in identifying risks of material misstatement due to fraud or error. You will brief Alex Kingo (a new audit clerk) on the assignment and accomplish this task in the next two weeks. Your findings are critical in forming an opinion on the financial statements of 8301. based on an evaluation of the conclusions drawn from the audit evidence obtained. Regards CPA Assy Bosiko Audit Senior Required: (a) Prepare briefing notes to Alex Kingo. explaining the; (i) different forms of analytical reviews you would use on sales revenue of RBCL. (4 marks) (ii) benefits of using analytical procedures when planning the audit at RBCL. (6 marks) (b) Discuss the matters Lutu it Partners will inquire from management in identifying risks of material misstatement due to fraud or error at RBCL (6 marks) (c) Explain the requirements for forming an audit opinion on the financial statements of RBCL to comply with the applicable financial reporting framework. (4 marks) (Total 20 marks)