You are an audit manager at Ali audit consultants Muscat, responsible for the audit of Johnson and co, a subsidiary of Ahmed & co. A different audit firm is responsible for the audit of Ahmed co and the Ahmed & co Group financial statements. The audit of the financial statements of Johnson and co for the year ended 31 July 2016 is nearing completion, but the following issues require your attention before the auditor's report is signed and your final communication is made to the group auditor in response to their request for information. The draft financial statements of Johnson and co recognize a loss before tax of OMR 50,000. Johnson and co has been loss making for several years and it generates insufficient cash to meet its significant debt obligations. The company relies on support from Ahmed & co in order to continue trading. Required: 1. Discuss how professional skepticism should be applied in the audit of Johnson and co. (5 Marks) 2. Discuss how professional Judgement should be applied in the audit of Johnson and co