Your firm has recently been appointed external auditor of Healthy Living Berhad (HLB) which is a listed company in Bursa Malaysia for the year ended 30 June 2020. You have been assigned to audit the sales and accounts receivables balances of XYZ for the year ended 30 June 2020. Background The principal activity of Healthy Living Berhad manufactures medical supplies examples are rubber gloves, surgical gloves, face masks and medical equipment. The following are extracts from the financial statements of HLB. Statements of profit or loss for the year ended 30 June 2020 Revenue 2020 (draft) RM 000 132,955 2019 Gross Profit 40,000 Statements of financial position as at year ended 30 June 2020 Current Assets Trade Receivables You ascertain as follows: 2020 (draft) RM 000 (15,555) (audited) RM 000 40,738 20,000 2019 (audited) RM 000 (6,413) The Healthy Living Berhad distribute its medical supplies to its approved distributors local and international. This is based on consignment sales, it is stated clearly in the agreement that these distributors will only get a 15% commission on the sales of the medical supplies. Meanwhile, all medical equipment is made to order and is despatched to customers once the whole order is completed. The medical equipment is manufactured at HLB premises and then transported to the hospitals or health care/nursery (old folk home), which includes installation. Customers are ordered to pay 75% including installation) when placing an order and HLB aims to deliver the unit within 6 weeks of the order date. The balance is to be paid within 30 days. It is a company policy to recognise revenue when the "consignment sales of the medical supplies and the made to order medical equipment are despatched".) You also noted the following: A quality issue of the medical supplies. In a rush to meet the overwhelming demand, a number of the medical supplies were returned by the approved distributor due to the product defect. The goods return was only conveyed to the warehouse. The company is experiencing a backlog of orders due to an increase in demand triggered by demand during the pandemic COVID 19. As a result, the factory is not fulfilling HLB's aim of delivering within 6 weeks of the order date. The trade receivables days have increased from 30 days to 60 days. Required: 1) State three important assertions in the above case. (3 marks) II) Identify three (3) internal control weaknesses in both sales and trade receivables. (6 marks) III) For each of the internal control weaknesses in (b) suggest the improvement that can be implemented by the company. (6 marks)