Question Two (2) [60 Marks) Your audit firm has recently been appointed as auditors of Health Work Lud, a listed company and you have been assigned to assist with planning the audit for the 30 June 2021 year-end. Due to a number of reasons the appointment was only finalised in March and as a result, work has already begun on formulating the overall audit strategy. You have ascertained, inter alia, that: 1. Health Lid is engaged in importing sports equipment. 2. Its head office and one warehouse) is located in Swakopmund, and it has distribution warehouses in four other major cities. 3. The turnover of the company is around N$ 750m per annum and the company is consistently profitable. Page 10 of 15 4. There is a workforce of 250 employees spread around the five locations eg. buyers, admin clerks, warehouse personnel. 5. The company has an internal audit division which is regarded as very efficient and effective. 6. The company has standardised accounting systems and related internal controls. A small IT department is located at head office. Branches are not linked to head office. All branches use the same in-house developed software. 7. The company sells to the retail sports trade and has in excess of 18 000 debtors. It sells only on credit 8. The reporting deadline is 28 July 2021. 9. The year-end inventory count takes place on either the last or second last Sunday of the financial year but at least 7 days before the end of the year, to facilitate the clearing of problems before year-end. All inventory is counted at the same time. 10. The board of Health work Ltd is regarded as highly competent and enjoys a good reputation in the business world. Because of the late appointment, the audit committee has requested a monthly meeting with the auditors to discuss audit progress commencing with a meeting in April. The engagement partner has requested you give some thought to a preliminary audit strategy for the first audit. REQUIRED: Indicate how the above information will affect your audit strategy (ie. scope, timing and direction) for the upcoming audit. (6OMARKS)