Using the above analysis and financial information given, discuss the results of the analytical procedures by outlining six (6) potential problem areas (that is, where possible material misstatements in the financial reports exist) and any other special concerns (for example, going concern). Specify the account balances and related assertions that would require particular attention in the audit. For each problem identified, you must use the above quantitative analysis to support your argument.

7. Analytical Procedures As part of the risk assessment phase, you conducted analytical procedures and the results are as below: Budget Account 2019-2020 Actual 30-Jun 2019 100% Interim 30-Jun 2020 100% 55% 28% 14% 8% 5% Total revenue COS Salaries expenses Administration expenses Selling expenses Borrowing Costs 56% 100% 54% 15% 8% 5% 2% Actual 30-Jun 2018 100% 58% 13% 6% 4% 2% 14% 7% 4% 2% Interim Budget Actual Actual Ratios 30-Jun 2020 2019-2020 30-Jun 2019 30-Jun 2018 2.0 1.4 0.3 2.3 1.0 0.9 1.3 2.6 4.3 6.5 4.9 6.8 Liquidity ratios Current ratio Quick ratio Inventory turnover Accounts receivable Solvency ratios Debt to equity Times interest earned Profitability ratios Gross profit ratio Net profit ratio ROA Return on Sh funds 0.8 1.4 -1.0 0.9 6.1 7.0 6.2 0.46 0.12 0.362 -0.102 -0.054 -0.116 0.44 0.12 0.12 0.42 0.13 0.13 0.23 0.23 WA