Willy, Georgie and Andy Tao are brothers who 75% of a contractor with a turnover of RM70 million, specializing in house renovation and improvements. The remaining 25% of the business is owned by their sister Bertha who lives in New Zealand and only comes during Chinese New Year. The books have been kept by Willy who a Diploma in Business Accounting as well as an MBA in Construction Management. Willy also prepared the accounts.

The company is profitable and the accounts have been files regularly as the Companies Commission of Malaysia. The accounts of Willy are reviewed by Ah Chong and Co. Ah Chong is Willys best friend at primary schools and they love singing at the karaoke every Friday night. Ah Chong also helps prepare the tax computations of the contractor business. Not to destroy the friendship, Ah Chong never gives any opinion on the accounts.

The Tao brothers now want to borrow a lot of money from the bank to acquire another contractor which is in financial difficulties. Bertha is unhappy that the contracting business gives small dividends and that the brothers charge a lot of their personal spending like parties at the karaoke to the business.

Describe the primary objectives of an audit.

(5 marks)