You are one of the members of the audit team of Computer express 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 Computer express management.

2018 2019

K'000K'000

Revenue 438,616 373,700

Gross margin 0.830.79

Expenses as a percentage of revenue:

Distribution costs 0.050.10

Administrative expenses 0.170.13

Selling expenses 0.180.25

Required:

(a) Given the information above, provide a list of questions you will ask and observations you will make about Computer express's performance. (10 marks)

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

c) Describe the substantive test that you should perform to confirm the figures. (5 marks)