HOLMES WP Question 1 (10 marks) There has always been a discussion in relation to the transparency of the entity and its financial report and key areas of audit risk. Required: In light of the above statement and in your own words, discuss both the expectation gap and the information gap in relation to the audit of the financial statement.

Question 1 (10 marks) There has always been a discussion in relation to the transparency of the entity and its financial report and key areas of audit risk. Required: In light of the above statement and in your own words, discuss both the expectation gap and the information gap in relation to the audit of the financial statement. Question 3 (7 marks) a) Zoom Tech Ltd investigates all variances above 10 percent of the flexible budget. The flexible budget for direct labour is $50,000. The direct labour rate variance is $4000 unfavourable, and the direct labour efficiency variance is $6,000 favourable. Required: Provide two possible explanations for each variance identified in this question. (4 marks) b) A flexible budget for Aqua Company for 5000 hours is shown below: Required: Prepare a flexible budget for 10000 hours and 14000 hours. (3 marks) Question 1 (10 marks) There has always been a discussion in relation to the transparency of the entity and its financial report and key areas of audit risk. Required: In light of the above statement and in your own words, discuss both the expectation gap and the information gap in relation to the audit of the financial statement. Question 3 (7 marks) a) Zoom Tech Ltd investigates all variances above 10 percent of the flexible budget. The flexible budget for direct labour is $50,000. The direct labour rate variance is $4000 unfavourable, and the direct labour efficiency variance is $6,000 favourable. Required: Provide two possible explanations for each variance identified in this question. (4 marks) b) A flexible budget for Aqua Company for 5000 hours is shown below: Required: Prepare a flexible budget for 10000 hours and 14000 hours