YOUR CLIENT, GM LTD, is in the brewery business, and operates brewery and bottling plantsin various locations around the world. Each country has a Regional Processing Centre (RPC),which acts as the accounting and administrative centre for that country. Each countryprepares ?nancial data and summarises the information into a package format. This packageis submitted to head of?ce in Perth on a monthly basis. Material balance sheet items consistof inventories, accounts receivable, accounts payable, brand names and property, plant andequipment. It is February 2015, you are currently planning the June 2015 audit and have the following information. Each situation is to be considered independently: 1'. Civil unrest in Country X makes it impossible for branch auditors to visit the RFC tocarry out audit procedures on your behalf. Due to a communications blackout, youare unable to ascertain whether the RPC is still functional. Country X contributes approximately 8% of GM's turnover. 2. In past years head office has maintained tight control over the operations of GM LTD.However, in keeping with current Total Quality Management principles, manyfunctions formerly performed at head office are now performed by each RPC.Management has expressed some concern at the quality of the monthly reportingpackages which it has been receiving, particularly those from the South Paci?c region.