Your firm is the external auditor of Masalu Ltd (Masalu) for the year ended 31 December 2023. The company is owned by members of the Maneno family, none of whom is involved in running the business. Masalu's principal activityis the installation of electrical systems for customers in the retail, construction and industrial sectors in the Tanzania. The company operates from premises in Mwanza and six freehold regional depots throughout the country. All contracts are fixed-price. Customers pay 95% of the contract price on completion of the work and withhold 5% of the contract price for up to six months from the date of completion in case remedial work is required. The materials and components used by Masalu are bought from Chinese suppliers who require payment within 30 days of the invoice date. Masalu made an operating loss during the year ended 31 December 2023. This was mainly due to a substantial bad debt in respect of a company which went into liquidation in September 2023, with insufficient fundsto pay unsecured creditors. As a result, Masalu experienced severe cash ow problems. In October 2023, to ease its cash owproblems, Masalu sold its Mwanza freehold premises and leased new premises. Masalu used