Question 2:The audit team is preparing to audit a new client in the toy retail industry. The client imports items from manufacturers in several Asian countries and retails them in a chain of shops located throughout the country.You have access to the following information for the client:-prior period financial reports-anticipated results for the current year-industry averagesRequired: i) Explain how you would use each source of information to develop an understanding of the client's operations, financial position, and environment (refer to ASA 315).ii) Explain how each source of information can assist the auditor in identifying and assessing risks of material misstatement, giving specific examples of risks relevant to the toy retail industry.

[OFFICIAL] Question 2: The audit team is preparing to audit a new client in the toy retail industry. The client imports items from manufacturers in several Asian countries and retails them in a chain of shops located throughout the country. You have access to the following information for the client: -prior period financial reports -anticipated results for the current year -industry averages Required: i) Explain how you would use each source of information to develop an understanding of the client's operations, financial position, and environment irefer to ASA 315). li) Explain how each source of information can assist the auditor in identifying and assessing risks of material misstatement, giving specific examples of risks relevant to the toy retail industry