Question 4 ISA 315 (Revised) Identifying and Assessing the Risks of Material Misstatement through Understanding the Entity and its Environment requires the auditor to perform analytical procedures in planning the audit. Required a) State the advantages of performing analytical procedure during the planning phase of the audit. (2 marks) You became aware of the following information regarding your audit client, Get It Write Ltd, which is listed on the stock exchange and is a distributor of office supplies: Get It Write Ltd is one of your audit firm's largest clients and to maximise efficiency, the audit firm tries to have minimum changes to the audit team. In fact, the partner has been on the audit for the past eight years and the client is quite satisfied with her service. Familiarity - Rotation of stafl - P The audit partner is very pleased that the previous finance supervisor at Get It Write has now joined the audit team as the new audit manager. The partner is of the view that this year's audit should be even smoother given that the previous finance supervisor for Get It Write Ltd knows the business and its operations very well. The tax authorities have challenged the accounting treatment of certain expenses by Get It Write Ltd and the CFO has asked the audit partner to make representation to the authorities on their behalf to have the matter settled as quickly as possible. The CFO has indicated his willingness to support the audit team's proposed increase in fees of 15% should we satisfactorily assist with their representation to the authorities. The CFO is also optimistic that the audit will flow smoothly because of the recent implementation of the accounting software which the audit team assisted with implementing. The CFO is particularly pleased with this new software because he believes this will address many of the internal control deficiencies which we had identified in previous years. Required b) Identify and give FOUR specific examples of ethical threats which may affect the independence of your audit firm in the audit of Get It Write Ltd. (4 marks) c) Explain how each threat identified in part (b) may be reduced or mitigated (4 marks) d) List two benefits of having an internal audit function. ( 2 marks)