ShopTop You are the audit senior for a long standing client, ShopTop. ShopTop is a retail giant in the high streets of the UK, providing affordable, fashionable clothing to men and women under the age of 25 . ShopTop is the subsidiary of a large retail group owned by 'Sir' Phillip Blue. Sir Phillip used to own another shop called British House Stores. British House Stores has been sold on to another buyer and is no longer under the ownership of Sir Phillip. British House Stores is now bankrupt and its pension funds are in extreme deficit. MPs in Parliament are debating over the conduct of Sir Phillip with regard to British House Stores and its pension capacity under his ownership. Sir Phillip may have his knighthood revoked. The audit for ShopTop is well under way and everything is proceeding smoothly. You are completing the substantive procedures for the client. To complete the substantive procedures, you have been joined by a new graduate employee of the firm, Sonali. Sonali has read the audit file and working papers on ShopTop prepared to date. She has requested a meeting with you to go over a few items regarding the audit on ShopTop. REQUIRED: Prepare a written response to your junior colleague Sonali on the following items. (a) I can see from the file that walk through tests and tests of controls have been conducted already. How are these different to substantive tests? Please explain the objectives of walk-through tests, tests of controls and substantive tests and give examples of each. (b) The working papers say that this audit has been conducted using the audit risk approach. I have only used the business risk approach before. What is the audit risk model? What are the main practical differences between the audit risk approach and the business risk approach to auditing? (c) I am concerned about the business conduct of Sir Phillip Blue and his unethical approach to British House Stores in the newspapers. I know British House Stores isn't our client but surely we should be considering this in our audit with ShopTop? Please tell me how you would respond to the information in the newspapers through the audit. (d) I can see from the substantive tests that you are asking me to obtain a bank confirmation letter. Why do I need to do this? Surely the evidence in the bank statement for the year end is sufficient and appropriate evidence already