Oceanic Dellghts Ltd. Is a medlum-sized business that operates ten seafood restaurants across Canada with four supply

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Oceanic Dellghts Ltd. Is a medlum-sized business that operates ten seafood restaurants across Canada with four supply centers in Edmonton, Hallfax, Quebec City, and Kelowna. The company follows Accounting Standards for Privote Enterprises (ASP), and Ricky Turner and his spouse Alex are the exclusive shoreholders. Oceankc Dellghts has a December 31st fiscal year-end. Oceanic Delights was established in 2010 by Ricky and Alex. The company procures fresh seafood directly from local fishermen at a competitive rate, later serving these delicacles to patrons in their upscale dining establishments. Ricky has consistently been hands-go with the business, serving as the company's CEO, whereas Alex has remalned uninvolved. The couple is presently navigating a difficult separation, and Ricky wishes to purchase Alex's stake In the business. A formal company appralsal is pending. Ricky has sought the services of the accounting firm Stone and Walker, CPA to conduct Occanic Delights' yeorly audit for the year concluding December 31, 2023. Displeased with Oceanic Dellghts' former auditors, Ricky terminated their services following a disagreement aver a recommended adJustment to revenue. Gourmet Seas Led. (Gourmet) is a competitor of Oceanic Delights. Gourmet Is Canada's leading sepfood dining chaln, managing 45 outlets in municipalities spanning the Northern and Central provinces. Unilke Oceanic Dellghts, Gourmet offers a more casual dining experience, which many Oceanic Delights' clents find attractive Over the past few years, Oceanic Delights' profit margins have declined, mainly due to competition and changing consumer preferences. The supply centers, where Oceanic Delight's seafood is stored, ore nearing their full capacity. Quiz information In June 2023, a significant power outage affected Oceank Delights' Halifax supply center, leading to spollage and losses in excess of $450,000. Several times Oceanic Delights has faced significant worldng capital restrictions. The company's bank, Northern Bank has provided Oceanic Delights with a $60,000 line of credit, which ls ofton at the maximum given the frequency of purchases that Oceanic Delights makos from Its suppliers. D Oceanic Delights recently applied for a $130,000 loan from Northern Bank to enable the company to buld a new supply center in Moncton. Norther Bank will be examining the finandal statements of Oceanic Delights carefully before deciding on whether to loan the money. Given the perishable nature of Oceanic Delights Inventory, there is a need for effective internal controls over the liventory to prevent wastage. Early In 2023, Ricky was provided with a list of non-existent or Ineffective internal controls from the auditor, but Ricky hasnt yet Implemented any of the auditor's recammendations. Towards the end of 2023, Oceank Delights Implemented a new accounting software after the company who supported the old system went out of buginess. The new system was Integrated without a concrete blueprint, with those in charge underestimating the intdathe's intricocy. Ricky, in his professional and client circles, is viewed as an individual of Integrity who holds himself and his employees to a high ethical standard. Although Ricky has high expectations from his team, he has no way of measuring their performance as he hasn't implemented job descriptions or formal policies. As a result of the lack of formalized systems and policies, Ricky's employees are, for the most part, happy and enjoy the relaxed culture of the company.

Part A Required:

Assuming that audit risk is low, conclude on inherent risk, control risk and planned detection risk at the overall financial statement level for Oceanic Dellghts. Explain the impact of your condusions on the audk of Oceanic Delights.

Part B Required:

Based on the results of Oceanic Delights risk assessment above, condude on which audit strategy should be used an explain why the recommended audit strategy was chosen.