unqualified audit report due to the company's satisfactory internal control system, stable business, and fairly stated account balances. However, in the current year's audit, you assigned a recently recruited senior in charge who was informed that the time budget should remain the same as in previous years. An interim audit uncovered issues with the company's computerized systems, a vacant chief accountant position for two months, and errors in compliance tests. Despite these findings, the original time budget was not revised, and the computerized systems were not tested by computer auditors due to a tight time budget. The year-end audit was completed within the time budget, and you were pleased with the effectiveness and efficiency of the audit team. A few months after the year-end, XAB Ltd. faced financial difficulties as the newly appointed chief accountant fled with $4 million cash. Investigation revealed that stocks were overstated due to wrong pricing in the computer system and inadequate provision for obsolete stocks. Sales and accounts receivable were also overstated as the chief accountant falsified sales invoices to maintain sales volume. Additionally, the audit assistant responsible for auditing stocks, who was a fresh graduate, only tested a few items and concluded that errors in stock pricing were immaterial. No detailed work relating to subsequent sales of year-end stock was carried out. Required: a. Explain why adequate audit planning is essential before commencement of actual audit work. (4 marks) b. Discuss five deficiencies of the audit in the above case and elaborate with reasons