Required:

a$)$ Define 'going concern' and state the auditor's responsibilities in respect of going concern. $(5$ marks$)$

b$)$ Identify FOUR potential indicators that the company is not a going concern and describe how these indicators could impact upon the ability of the company to continue trading on a going concern basis.

$(10$ marks$)$

c$)$ Explain FIVE audit procedures that the auditor of Fondana$-$CO should perform in assessing whether or not the company is a going concern. $(10$marks$)$

d$)$ Identify and describe FIVE audit risks in the case. Explain the auditor's response to each risk in planning the audit of Fondana$-$Co$.$

$(15$ marks$)$

Question $2$

Analytical procedures are one of the eight types of evidence, Because of the increased emphasis on analytical procedures in professional practice it is very important that young accountants understand the concept. With reference to the statement above on Analytical Procedures explain the following;

$($i$)$ what is meant by the term 'analytical procedures'. $(2$ marks$)$

$($ii$)$ the different types of analytical procedures available to the auditor; and $(4$ marks$)$

$($iii$)$ the situations in the audit when analytical procedures can be used. $(4$ marks$)$