Question 1

T&N’s manufacturing subsidiary in Singapore, TNM, is the first Group company in Singapore that is not a dental practice. It was operating at 75 percent capacity as of 31 December 2021, supplying surgical masks to all the T&N dental outlets in Singapore. When operating at full capacity from 2022 onwards, it may also sell to other dental practices locally.

(a) Analyse the changes to the Group financial information between 31 December 2020 and 31 December 2021, to demonstrate the impact of TNM’s operations on:

• Costs of
• Employee benefits
• Operating
• Property, plant and
• Depreciation

(b) Based on your analysis, evaluate and explain one (1) financial statement item at high risk of material misstatement (RMM).

(c) For the RMM evaluated, explain the key substantive procedures PQS should perform, and the audit exception(s) that PQS would identify through these substantive procedures.

You may use the following templates to organize your answers for Question 1 (a), (b) and (c). Please note there is a 3-page limit for your answer to Question 1.