Section B Choose any TWO questions Question 2 (Football Plc). a. You are provided with the extract of the statement of Profit or loss account and the statement of financial position of Football PIc Statement of Profit or Loss for the year ended 30 June 2021 (extract) Statement of Financial Position as at 30 June The following additional information is provided to you: 1. During the year Football Plc sold plant that had a carrying value of 17,500 at a loss of 5,500. The original cost of this plant was 45,000. At 30 June 2021 , only 50% of the sale proceeds was received. The remaining receivables was included in trade and other receivables. 2. Football Plc purchased a new equipment at a price of 44,500 on 1 July 2020 . At the time of purchase the company had settled only 25,000. The remaining was settled on 1 July 2021 along with an interest of 850. The company had included the interest amount in the interest accrued figure while balance due on equipment was included in trade and other payables. 3. During the year Football Plc acquired brand of Futsal Plc, for 100,000. The terms of settlement were cash payment of 50,000 and 25,0001 equity shares of Football at 2 each. 4. Except for adjustment in (3), all the other changes in intangible assets are purely pertaining to amortisation charges during 2020-21. 5. During the year Football plc declared and paid dividend. You are required to prepare a statement of cashflow in indirect method as per the requirements of IAS 7 Statement of Cash flows. (20 Marks) b. Auditors are known to be watchdogs of companies and to that extent they are required to monitor the company and raise redflags when appropriate. Critically evaluate this statement and citing past cases discuss the reasons for audit failure