QUESTION $2-$ Evaluation of an auditor's report $(25$ marks$)$ Mr Audire is a director of Attest, an international firm of external auditors. He works at the Sandton office of the firm. Mr Audire is the engagement partner on the audit o FitFoods Limited. The company is listed on the JSE. The audit team has completed the audit of the company for the year ended $30$ June $2022$ and the audit senior prepared the following draft auditor's report: Auditor's report FitFoods Limited Opinion We have audited the financial statements set out on pages $34$ to $112,$ which comprise the statement of financial position as at $30$ June $2022,$ and the statement of profit or loss and other comprehensive income, and statement of cash flows for the year then ended, and notes to the financial statements. In our opinion, except for the possible effect of the matter described in our report, the financial statements present fairly, in all material respects, the financial position of FitFoods Limited as at $30$ June $2022,$ and itsfinancial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards. Basis for opinion Included in accounts payable is an amount of R$56$ million. The company did not have adequate internal controls to maintain records of accounts payable for goods and services received but not yet paid. We were unable to obtain sufficient appropriate audit evidence to substantiate the accruals disclosed in note $30$ to the financial statements. Consequently, we were unable to determine whether any adjustments were required to the financial statements arising from accounts payable and accruals not brought to account or incorrectly stated. We conducted our audit in accordance with International Standards on Auditing $($ISAs$).$ We are independent of the company in accordance with the Independent Regulatory Board for Auditors Code of Professional Conduct for Registered Auditors $($IRBA Code$),$ together with the ethical requirements that are relevant to our audit of the financial statements in South Africa. The IRBA Code is consistent with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants $($Part A and B$).$ We believe that the audit evidence we have obtained provide a basis for our opinion. Other information The other information comprises the Directors Report as required by the Companies Act of South Africa. In connection with our audit of the financial statements, if$,$ based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. The financial statements The directors are responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern. The audit of the financial statements Our objectives are to obtain assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report. Reasonable assurance is a high level of assurance, a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. As part of an audit in accordance with ISAs, we: o Identify and assess the risks of material misstatement of the financial statements, design and perform audit procedures, and obtain audit evidence to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is more important than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations. o Obtain an understanding of internal control in order to design audit procedures that are appropriate in the circumstances. o Evaluate the appropriateness of accounting policies used and the reasonableness of related disclosures made by management. o Conclude on the appropriateness of the directors' use of the going concern basis of accounting. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or$,$ if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. o Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant deficiencies internal control that we identify during our audit. Attest Registered Auditors $25$ July $2022250$ Stonegray Avenue Sandton YOU ARE REQUIRED TO: Evaluate the draft auditors report for its compliance to SAAPS $3($issued in $2015)$and ISA $700($revised$).$ Provide all changes that shoud be made to ensure that the draft report adheres to the mentioned pronouncements