QUESTION THREE You are the audit manager with Kaycee & Associates, a firm of Chartered Accountants in charge of the 2021 audit of Mantemante Ltd. The issue below occurred during the audit of Mantemante Ltd. Trade receivables Trade receivables recognised in the companys current assets includes a balance of GH200,000 relating to a specific customer, Tonto Ltd. Audit procedures indicate that as at 31 December 2021, the balance was more than six months overdue for payment. In relation to this balance, the following procedures have been performed: Agreement of the balance to invoices and original customer order. Discussion with the credit controller who states that we are in discussions with Tonto Ltd and we are confident that some or all of the amount due to us will be paid. We have always allowed this customer extended credit terms and they have always paid eventually. Tonto Ltd was included in the trade receivables direct confirmation audit procedure, whereby a sample of customers were asked to confirm their respective outstanding balance, but no reply was received. Required: a) In respect of the trade receivables: i. Comment on the sufficiency and appropriateness of the audit evidence obtained. ii. Recommencement the actions to be taken by the auditor, including the further evidence which should be obtained. QUESTION FOUR Lartey Company Ltd (LCL) is a Private Limited Liability Company that was incorporated several years ago under the Companies Act, 1963 (Act 179) now Companies Act, 2019 (Act 992). The company is currently listed on the Ghana Stock Exchange. LCL is one of the worlds leading leisure travel providers, operating under several brand names to sell packaged holidays. The company catered for more than 10 million customers in the last 12 months. Draft figures for the year ended 30 September 2020 show revenue of GH320 million, profit before tax of GH15 million, and total assets of GH410 million. LCLs executives earn a bonus based on the profit before tax.

You are the senior manager responsible for the audit of LCL. The final audit is nearing completion, and the following points have been noted by the audit senior for your attention: Acquisition of Esinam Co. Ltd. On 15 November 2020, LCL acquired Esinam Co. Ltd, a company offering adventure holidays for independent travelers. Esinam Co. Ltd represents a significant acquisition, but this has not been recognised in the financial statements.

Required: Comment on the matters raised and in your review of the working papers, state the audit evidence required to draw reasonable conclusions for the year end 30 September 2020.