QULSTIONONE You are an aodit manager of Kwame Obosu 2 Associates (KOA). a firm of chartered accountants and tax practitioners and you are planning the audit of Belso Manufacturing Compuny Limited, a listed company. for the year ending 31 March 2022. The company manufactures coenputer components and forecast profit before tax is GHe33-6m and total assets are GHe79-3m. Belso Manufacturing Company Limited distributes its prodocts through wholesalers as well as via its own website. The website was upgraded during the year at a cost of CHHet-In. Adilionally, the company entered into a transaction in Fcbruary to purchase a new warchouse which will cost GHe 32m, Belso Masufacturing Company Limited's legal advisers are working to ensare that the legal process will be completed by the year end. The company issaed GlHS 5m of imrodectmable prefeetence shares to finance the warchouse purchase. During the year the finance director has increased the usefal ecosomic lives of fixtures and fitings froen three to four years as be felr this was a more appropriate period. The finmee director has informed the engagement partner that a revised credit period has been ageed with coe of is wholesale customers, as they have been experiencing difficulties with repaying the halasce of GHe1-2m owing to Belso Manufacturing Company Limited In January 2022, Belso Manufacnaring Company Limited introdeced a new bonus based on sales targets for its sales slaff. This has resulted in a significant number of new wholesale costomer accounts being epened by sales staff. The new customers have been given favourable credit tenms as an introductory offer, provided goods are parchased within a twe-enonth peried. As a reselt, revenve has increased by 5% on the prior year. The company has launched several new products this year and all but ene of these new launches bave been successful. Feedback on product ' YOT', laanchod four months ago, has bees mixed, and the cempany has jast received notice from one of their customens. Lang Cempuny Led of an intended legal action. They are alleging the product sold to them was faulty, resulting in a sigrificant loss of information and an ongoing detrimental impact on profis As a precaution, sales of the 'YOT' product have been halted and a prodact recall has been initiated for any 'YOT' products sold in the last four months. The finance director is keen to announce the company's financial resalts to the stock market earlier than last year and in ofder to facilitate this, he has asked if the aodit coeld be coenpleted in a shorter tirnescale, In addition, the company is intending to propose a final dividend ence the financial statements are finalized. Belso Manufacturing Company Limited's finance directur has informed the aadit engagement partner that one of the company's non-executive directoes (NED) has jas resigned, and be has enquired if the partners at Kwame Obosu \& A Associates can help Belso Manufactaring Company Limited in recruiting a new NED. Specifically, he has requested the engapement quality coetrul revicwer, who was until last year the aadit engagement partner on Belso Manufacturing Company Limited, assir the compuny in this recruitment. KOA also provides taxation services for Belso Manufacturing Compuny Limited in the form of tax return preparation along with some tax planning advice. 2 The finance director has recommended to the audit comminee of Belso Manufacturing Company Limited that this year's audit fee should be based on the company's profit before tac. At today's dase, 20\% of last year's audit foe is still outstanding and was due to be paid three months ago. Required: (a). Describe FIVE audit risks, and explain the auditer's sespoese to each risk, in planning the avdit of Belso Company Lad. (20 marks) Note: Prepare your answer using two columns headed Aadir risk and Audisor's response respectively