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Risk Assessment
Charlotte has drafted an audit plan for a new client. The client is Trink's Treats, a café and catering business. Trink's Treats earns 70 per cent of its revenue from the café (food and beverage sales for sit-down customers and take-away) and 30 per cent from catering. Charlotte's plan shows that audit time is divided to reflect this revenue pattern (that is, 70 per cent of the audit time is spent on the café business and 30 per cent of the time is spent on the catering business). Charlotte believes that the significance of the revenue activities should be the only driver of the audit plan because the client has no related parties and a simple, effective corporate governance structure.
Required
Problem 1: What questions would you have for Charlotte before accepting her audit plan?
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