You currently work for Finezz Incorporated. You were promoted to Audit Manager last month after you passed the Assessment of Professional Competence exam. Your first task as Audit Manager was to evaluate the independent report below. A trainee drafted the report on a review engagement, in accordance with IFRS for SMEs and the requirements of the Companies Act of South Africa. The report was for the client Afrisave Distributors (Pty) Ltd for the year ended February 2022. Finezz Incorporated does not do a lot of reviews as most of the clients require a formal audit. Independent report To the Board of Directors of Afrisave Distributors (Pty) Ltd Finezz Incorporated has evaluated the financial statements of Afrisave Distributors (Pty) Ltd which comprises of the Statement of Financial Position, the Statement of Comprehensive Income, the Statement of Changes in Equity and the note for fairness based on our annual audit carried out in terms of the Memorandum of Incorporation of the company. The Audit Committee is responsible for the preparation of the financial statements and the prevention of fraud. The auditors responsibility is to express an opinion and in doing so, to detect any fraud which may have a material effect on the financial statements not having been prevented by the directors. Finezz Incorporated conducted the review in terms of Generally Accepted Auditing Standards. Finezz Incorporated reports on the following aspects of the audit:

1. An expert was engaged by Finezz Incorporated to assist in the valuation of work-in-progress. Due to the complexity of some of Finezz Incorporateds lighting systems, the risk of misstatement in work in progress warranted this.

2. Finezz Incorporated is currently being sued by a former employee who suffered a personal injury at work whilst testing electric current flow during quality control procedures.

3. With regard to the detection of fraud, SNAP detected wage fraud relating to unauthorised overtime. SNAP reported this to management who subsequently dismissed the perpetrators. In our opinion (SNAP), except for the matters raised in 1 to 3 above, no outstanding issues aroused from the review which causes us (SNAP) to believe that these financial statements do not fairly present.

Finezz Incorporated 28 February 2021

Jacques Venter Pretoria

Required

Detail the errors/deficiencies in the review report presented to you for evaluation (give explanations where necessary). You are not required to redraft the report.