Ican 2026 Advanced Audit Assurance And Forensics Question 6

Gubico Limited was incorporated to carry on haulage business, chartering of trawlers, trawling, and fishing. It commenced business in the same month. The company acquired another entity as its subsidiary which is into the business of hospitality, indoor and outdoor catering services in 2022. Both the parent and subsidiary have December 31, as the year-end for the preparation of their financial statements. The company, in 2022, decided to embark on a large scale fish production. It, therefore, acquired a piece of land for fish and shrimps farming. The farm is located on a vast expanse of 250 hectares of land around the beach and utilises 150 hectares of the land for production. The subsidiary in hospitality and catering business also patronise Gubico Limited on normal business terms instead of patronising third party companies which might largely charge heavily for same products (mainly fish and shrimps). The company’s tropical fish and shrimps are distributed worldwide in over 20 countries. The company aims to substantially increase her export volumes overtime. FIK Professional Services has completed six years as Gubico’s auditors and in line with good practice, the company is, therefore, opening doors of opportunity to another firm to be appointed auditors for the group, but this time as a joint auditor. The subsidiary has a separate audit firm. The current auditors are also formally invited to submit their proposal for the audit. The successful external auditors will express opinion on the group financial statements, which shall be prepared in accordance with International Financial Reporting Standards (IFRS). Eligible audit firms should meet the following criteria: i. compliance with relevant legal and regulatory requirements for external audit firms; ii. experience with audit reporting under International Financial Reporting Standards and International Standards on Auditing (“ISA”); iii. evidence of having performed similar audits within the last five years; and iv. the curriculum vitae for the partner, manager and key staff proposed for the audit team. Your firm has received the request for proposal and has indicated interest in the audit. You are the proposed engagement partner for the audit.