Question: QUESTION 3 [10 marks) You have just completed the understanding the entity and its environment stage of the planning of a new, client Bull Dog

QUESTION 3 [10 marks) You have just completed the "understanding the

entity and its environment" stage of the planning of a new, client

QUESTION 3 [10 marks) You have just completed the "understanding the entity and its environment" stage of the planning of a new, client Bull Dog (Pty) Ltd. You have established the following: i. The financial accountant and financial director are not co-operative with the external auditors. ii. A significant portion of the company's operational equipment is in remote and isolated areas and in neighbouring countries. The company is involved in long term contracts which can last up to five years. iv. All journal entries are put through by the financial director. He is the only person with access to the "journal entry module" on the company's local area network. You are required to: In heren a) Assess the risk of material misstatement at financial statement level. Give reasons. (5) b) Assess the risk of material misstatement at assertion level. Indicate which assertions are effected

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