Question Four (15 marks) Consider the following independent situations, all of which apply to audits of entities for the year ending 31 December 20X7: (i) Slipway Limited, a listed company, has been experiencing declining sales over the last 2 years. Cost cutting has proved difficult due to the high level of imported machinery used in Slipway's operations and consequently margins have been falling. While the bankers are presently happy to continue providing Slipway with loan facilities, they do expect to see improved results in the next financial report. Articles about Slipway's expected financial results appearing in recent press reports all had quite a pessimistic tone. Question Four (15 marks) Consider the following independent situations, all of which apply to audits of entities for the year ending 31 December 20X7: (i) Slipway Limited, a listed company, has been experiencing declining sales over the last 2 years. Cost cutting has proved difficult due to the high level of imported machinery used in Slipway's operations and consequently margins have been falling. While the bankers are presently happy to continue providing Slipway with loan facilities, they do expect to see improved results in the next financial report. Articles about Slipway's expected financial results appearing in recent press reports all had quite a pessimistic tone