Your client is finance company, which is a subsidiary of a group whom major business in retail company. The retail products are electronics and furniture home appliances. They sell the product to end user by provide credit and installments. Your client is financial company that handling the credit. In order to cover the credit from the customer, your client needs funding. They earn funding from bank loans and issue medium term notes. Start from several years ago, the retail business has decreased, due to a changing trend, where end users switch from retail to online shopping. These conditions make the client's bank loan and medium-term notes become non-performing loan. The client use account receivable from retail customer as loan collateral to the bank. According to the information you got from your partner, which is a forensic accountant, there is indication that many of the current year account receivable that used as loan collateral were fictitious. You aware that your auditors independent report is crucial to the user of your client financial statement, first the bank, second the medium-term notes holders, and securities rating agency

Questions:

a. Illustrate what kinds of audit procedure you will conduct to audit client non-performing loan!

b. What you do, if true that many loan collaterals were fictitious?

c. What kinds of auditors independent report, you are going to provide to this client if the client persist and no future plan to refinancing the debt?