"place to ensure that appropriate accounting principles and standard have beenfollowed (Metcash, 2016).3. Compliance with Laws and Regulation – The FMCG market is one that is prone tochanges in laws and regulations all the time and hence the board and managementshould set systems to better monitor these developments (Metcash, 2016).4. Maintenance of an Effective, Efficient and Independent Audit – Metcash shouldensure that their internal and external auditor are adequately resourced and that scopeof the audit is placed on audit risk where special attention is necessary (Metcash,2016).5. Separation of duties – In day to day operations, Metcash stores have employeesreceives the shipment of goods and then registers it into the inventory. There needs tobe a control to prevent manipulation of stock counts by using different employees fordifferent tasks (Biz, 2016).15 | P A G E 5. Acquisition of Woolworth’s Home Timber and HardwareBusiness and its Effect on 2017 Audit PlanAcquisition of Woolworth’s HTH business will have the following implications on theaudit plan:1. Increased OperationsThe scale of auditing sample for audit procedures would have to be increased to matchthe scale of growth after the acquisition2. Entry into Additional LocationsPrior to the acquisition, with Mitre 10, Metcash had hardware business in Qld, Vic, andWA. Post-acquisition, resources for auditing will have to be deployed in NSW as well, sofactors such as the costs and feasibility of this will also have to be part of the audit plan.3. Establishing Relations with Potential New ShareholdersThis acquisition is likely to attract new shareholders, who will then have to be briefed onall audit plans as at the end of the day, auditors are answerable to shareholders.4. Close Scrutiny of Gearing RatioThe acquisition is making the firm’s overall gearing ratio increase from 17% to 20%.This will have to be monitored continuously.16 | P A G E 6. ReferencesACFE. (2016). Brisbane chapter. Retrieved September 24, 2016, fromhttps://brisbaneacfe.org/library/third-party-fraud/common-financial-statement- frauds/Biz, R. (2016). Revealed: IGA's top retailers worldwide. Retrieved September 25, 2016, fromhttp://www.retailbiz.com.au/2016/03/03/article/Revealed-IGAs-top-retailers- worldwide/BISLGZTVJDHouspian, A. (2016). AFR Weekend. Retrieved September 25, 2016, fromhttp://www.afr.com/street-talk/burson-buys-metcashs-auto-business-for-275- million-20150614-ghnw5aLouwers, T. J. (2007). Auditing and. New York, NY: McGraw-Hill/Irwin.Low, C. (2015). Sydney Morning Herald. Retrieved September 22, 2016, fromhttp://www.smh.com.au/business/retail/metcash-finalises-new-structure-job- losses-expected-20160513-gouuiy.htmlMarasco, J. (2012). StoneBridge. Retrieved September 24, 2016, fromhttps://stonebridgebp.com/library/uncategorized/expense-reimbursement-fraud- ten-ways-to-protect-your-organization/Metcash. (2016). Metcash corporate governance. Retrieved September 25, 2016, fromhttp://www.metcash.com/investor-centre/corporate-information/corporate- governance/17 | P A G E "