WOPER G 20 pts You qualified as a Chartered Accountant five years ago and have recently won your first new audit client as a partner in a medium sized farm of Chartered Accountants. The client is Bricks & Sand Ltd, a chain of builders' merchants. The opportunity to pitch for the client came about as a result of a chance meeting with an old friend, Emile Ware. Emile started a training contract at the same time as you, but did not manage to qualify and is now in charge of the internal audit department Bricks & Sand Ltd. He put in a good word for you with the managing director and as a result you were invited to tender for the audit. He is delighted that you won the job and has already invited you to dinner to celebrate The internal audit department of Bricks and Sand Ltd is well established and visits each branch annually to ensure that operational and financial procedures are operating as planned. All of the internal audit reports for the financial year have been made available to you as part of your planning From these, you can see that their focus is operational, and they concentrate heavily on the testing of controls surrounding inventory. They also test extensively to ensure that supplier marketing and promotional contributions are all spent as agreed in the supplier contracts During the year, Bricks & Sand Ltd purchased one of their suppliers, Best Bricks Ltd and the associated goodwill is included in the entity statement of financial position at a material amount. This has not been amortised during the year since the managing director considers it to have an indefinite useful economic e Required: 1. Evaluate whether you may be likely to breach any fundamental principles and suggest how this could be mitigated. 2. Consider the extent to which reliance can be placed on the internal audit function for the purposes of auditing inventory 3. Having assessed the audit risk surrounding inventory, analyse the required audit evidence and suggest a plan for the audit of inventory 4. What steps would you take to audit the goodwill? 15 Ma (To