You are auditing the financial statements of Makibra Ltd, a manufacturing company in Tamale. You noticed during your reviews that the accounts receivable for the year 2022 were 196% of the previous years balance of GH₵1,590,400.00. Upon further investigations, you discovered that a major customer of the Makibra Ltd who owes 60% of the 2022 accounts receivables filed for bankruptcy on 28 November 2022. The financial statements have not been adjusted for this potential loss. Required: (i) Discuss the potential impact of the bankruptcy of the financial statements Makibra Ltd for the year ended 31 December 2021 (ii) Outline the audit procedures you would perform to gather sufficient appropriate audit evidence regarding the collectability of the accounts receivable and assess the need for adjustments in the financial statements, if any.
