RAA Auditors Inc. had been the auditors of the Cars Ltd group since $2010.$ They resigned as

auditors in the prior year as they felt that the audit was too complex for them and they lacked

the resources to perform the audit. They also did not have an amicable relationship with the

financial director as they uncovered fraudulent activities that he was involved in$.$

The group has a tight reporting deadline and has set a precedent to release its audited annual

financial statements two months after year end.

Your audit firm accepted the engagement as the new auditors for the $31$ December $2021$

financial year of the Cars Ltd group at the AGM held in March $2021.$ Your audit firm is a medium

sized audit firm located in Gauteng and specialises in small to medium sized entities.

Your firm has begun doing the planning procedures for the current year$$s audit.