You are one of the members of the audit team of world computers which is growing at a rapid rate despite being in the competitive industry. The following is part of the information obtained from a planning meeting which the audit manager had with world computers management.

20182019

K'000K'000

Revenue438,616373,700

Gross margin0.830.79

Expenses as a percentage of revenue:

Distribution costs0.050.10

Administrative expenses0.170.13

Selling expenses0.180.25

Required:

(a) Given the information above, make a list of questions you will ask and observations you will make about world Computers performance. (10 marks)

(b) Describe what further information and explanations you will ask for from world Computer management during the audit. (5 marks)

c) Describe the substantive test that you should perform to confirm the figures.