Your firm has been appointed as external auditor to Supreme Sdn Bhd (Supreme) for the year

ended 31 May 20X9. Supreme's principal activity is the hiring out of limousines. The company

commenced trading on 1 June 20X8 and, although the company's revenue and assets are

below the thresholds for statutory audit purposes, the company's bank requires the financial

statements to be subject to a full audit. Your initial enquiries reveal that a computer package is

used to maintain the accounting records. These records are maintained by a part-qualified

accountant who is helped by a part-time payroll clerk.

Requirement:

State, with reasons, an appropriate approach to the audit of Supreme, which addresses the

extent of tests of control and substantive procedures, including analytical procedures.