(i) ½ mark per ratio calculation per year.

– Gross margin
– Operating margin
– Inventory days
– Receivable days
– Payable days
– Current ratio
– Quick ratio

max marks 5

(ii) Up to 1 mark per well explained audit risk and up to 1 mark per audit response

– Management manipulation of results
– Sales cut-off
– Revenue growth
– Misclassification of costs between cost of sales and operating
– Inventory valuation
– Receivables valuation
– Going concern risk

max marks 10