Analytical procedures

Question 1 - Analytical Procedures You have been asked to review the gross margins for Mega Books Lid for the years 2014 through 2017. You find there's been a significant decline during this time. Here are the numbers: 2017 2016 2015 2014 Sales ($'000) 47,175 41,039 37.075 35,035 Cost of Goods Sold (S'000) 30314 27.998 23,431 22,072 Gross margin 16,861 15.041 13.642 12.963 Percent 35.7% 364% 36.8% 37.0% Your discussion with Brick O'Neil, the financial controller, gs to light two possible explanations He informs you that the indus stry declined fairly steady for 3 years as more people for part of the decline. He also believes that online shop bunt books i rapidly expanding ts non-book items, such teis sold. O'Neil feels strongly that these two factors The following additional information is obtained from indepe ad the client's records as a means of investigating the controller's explanations, Mega Books ($1900 Industry Gross Profit Book Sales Non-booky Non-Hool Percent for Retailers of Cost of Cost of Books and Related CODE ROLL Products $21.500. 39.8 2016 20.472 390 2015 40.0 Required Evaluate the ex plane is to support your conclusion 16 marks Which soci require intensive investigation in