You are the group audit manager responsible for the audit of C-Group for the year ended 31 December 2020. Mr. Chan is the Chief Financial Officer (CFO) of C-Group. Mr. Chan works closely with Mr. Lee, the Chief Executive Officer (CEO) of C-Group. Mr. Lee plans to expand C-Group as quickly as possible to demonstrate his ability to his father, the founder and one of the major shareholders of C-Group.

Additional information (1)

C-Group owns residential apartments to generate rental income. Until 31 January 2020, one of the apartments was rented for $55,000 a month to a tenant. Since 1 February 2020 it has been occupied rent-free by Mr. Chan as non-monetary housing benefit from C-Group. Besides, C-Group has been leasing its head office from Mr. Lees father since operation and they considered the terms and conditions are at arms length.

C-Group, which comprises a parent company (C-1 Company) and two subsidiaries (C- 2 Company and C-3 Company) as a group. Each subsidiary contributed to the groups 20% of revenue and are audited by another reputable well-known audit firm, Lee & Lee Co. (Lee & Lee).

Requirements:

a) Describe five important matters that you should consider when you know the additional information (1) and state the relevant audit evidence that you expect to find in undertaking your review of the audit working papers and financial statements of C-Group in relation to those matters that you described.