You are an Audit Senior at Audit$4$U Limited $($Audit$4$U$),$ which provides various

assurance services to clients, such as audits and reviews. During the year, Audit$4$U

was approached by a possible review client called Manuscript $($Pty$)$ Ltd $($Manu$).$ Manu

has a $31$ August $2024$ financial year end and requires the review to be done by $30$

November $2024.$ Manu complies with the International Financial Reporting Standards

$($IFRS$).$ Manu operates in the mining sector, and this will be the first time that Audit$4$U

will be performing a review on a client from the mining sector.

The previous audit firm resigned as Manu's reviewers due to a disagreement with

management about accruing bonuses at year$-$end. The reviewer's resignation took

place during the $2024$ financial year. Manu's management stated that this bonus will

only be paid in the next financial year. Hence, management does not see any need to

accrue the bonus in the current financial year. The bonus was a material amount.

The Chartered Accountant $($CA$($SA$)),$ Barry White, who will be signing off as a

reviewer, is close friends with the Chief Financial Officer $($CFO$)$ of Manu. Barry White

and the CFO were university friends and usually do family holidays together. In

addition, the CFO stated that if Audit$4$U accepts this review engagement, the CFO will

ensure that Barry White will get paid an additional R$100000$ for him to use in his

personal capacity.

Insurance expenses

You have to review the insurance expenses account. From a discussion with

management, Manu has only entered into one insurance agreement. This insurance

is related to the insurance paid to Insure Limited for Manu's building, which is owned

by Manu. There is an agreement between the two parties, and it was entered into on

$01$ September $2022$ in the amount of R$35000$ per month with an escalation rate of

$10\%$ each year on $01$ September.

REQUIRED:

$2\mathrm{.}1$ Discuss whether or not Audit$4$U Limited should accept or reject the review

engagement of Manuscript $($Pty$)$ Ltd$.$

$2\mathrm{.}2$ Discuss how materiality is determined for a review engagement and the

difference in materiality calculation between a review and an audit engagement.

$2\mathrm{.}3$ Provide review procedures for the year's insurance expenses to obtain limited

assurance.

Assume that Manuscript $($Pty$)$ Ltd was accepted as a review client.