Please answer all question 2

QUESTION Two (Assertions at risk procedures and evidence) You are an audit senior and your firm audits a manufacturing company (Happy Ltd) that operates Australia. It concentrates on skin cosmetic products. Consider the following situations that have a during the audit for the year-end 30 June 20X0 risen In January 20X0, Happy Ltd acquired a small sole manufacturer of a skin cream, Look Young Pty note that the cream uses a special mix of ingredients that is only known to the owner. This sp Ltd. You cream is very popular and enjoys a high sales volume providing Happy Ltd with a hefty profit as at 30 20X0. Look Young's lawyers hold this information to this secret mix of ingredients. You note that the v this secret mix of ingredients has not been recoanised on the statement of financial position Pty Ltd and has not been incorporated in the financial statements of Happy Ltd as at 30 June 20X0. Yo of the opinion that the value of this special mix of ingredients needs to be reflected in the fi statements of Happy Ltd ecific skin alue of of Look Young nancial REQUIRED: Identify the name of the account balance that needs to be reflected in the financial statements of Happy Ltd. (0) (i) Identify 2 key assertions most at risk in relation to this account balance. Provide a comprehensive explanation as to why each of the assertions you identified in (i) above is at risk (iv) For each of the risks identified, describe a practical substantive procedure to address it. (3+6+6+6 21 Marks) QUESTION Two (Assertions at risk procedures and evidence) You are an audit senior and your firm audits a manufacturing company (Happy Ltd) that operates Australia. It concentrates on skin cosmetic products. Consider the following situations that have a during the audit for the year-end 30 June 20X0 risen In January 20X0, Happy Ltd acquired a small sole manufacturer of a skin cream, Look Young Pty note that the cream uses a special mix of ingredients that is only known to the owner. This sp Ltd. You cream is very popular and enjoys a high sales volume providing Happy Ltd with a hefty profit as at 30 20X0. Look Young's lawyers hold this information to this secret mix of ingredients. You note that the v this secret mix of ingredients has not been recoanised on the statement of financial position Pty Ltd and has not been incorporated in the financial statements of Happy Ltd as at 30 June 20X0. Yo of the opinion that the value of this special mix of ingredients needs to be reflected in the fi statements of Happy Ltd ecific skin alue of of Look Young nancial REQUIRED: Identify the name of the account balance that needs to be reflected in the financial statements of Happy Ltd. (0) (i) Identify 2 key assertions most at risk in relation to this account balance. Provide a comprehensive explanation as to why each of the assertions you identified in (i) above is at risk (iv) For each of the risks identified, describe a practical substantive procedure to address it. (3+6+6+6 21 Marks)