Analyse the ratios in conjunction with the additional information and identify from your analysis, implications for the audit and any particular audit steps that need to be undertaken to reduce audit risk. For example if there was a worsening debtor’s turnover, one of the audit steps would include a review of the provision for doubtful debts. Ensure that you also identify any potential weaknesses in this ratio analysis and any additional information that you will need to make a judgement about the business risk facing the company.

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