QUESTION 2

Your firm has recently been appointed as the external auditor of Naga Berhad (Naga), a listed company, for the year ended 30 November 2021, following the resignation of the previous auditor. Naga is an online retailer offering customers a choice of over 1,000 items of groceries and household goods. Customers place their orders online and their orders are hand-picked and delivered to customers by Naga using its own delivery vehicles. Naga operates from 10 freehold distribution centers throughout Malaysia. You are the audit senior and the engagement partner has asked you to consider the following three key areas of audit risk: Volume-based supplier rebates Non-current assets - delivery vehicles Non-current assets - freehold distribution centers. The engagement partner provided you with the following extracts from the draft financial statements: