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Question CHANDLER CO This scenario relates to two requirements. It is $1$ July $20$X$5.$ Chandler Co purchases and distributes organic fruit and vegetables to individuals and companies. Fruit and vegetables are purchased from farms, predominantly from local farms, although some seasonal produce is imported. Goods are delivered to customers on a weekly basis using Chandler Co's own vehicles. Individual customers are required to pay by credit card when placing an order. Corporate customers are given credit terms of $30$ days. The company's financial year ended $30$ April $20$X$5.$ You are the audit manager and the final audit commenced last week. The following matters have arisen: Trade receivables The finance director of Chandler Co has requested the auditor not to send confirmation requests to customers. As it is two months since the company's year$-$end and most customers have paid, the director sees no point in annoying his customers with a letter simply to confirm payments already made. The audit partner has agreed. The receivables balance is material to the financial statements. Share capital The board of Chandler Co decided to make a rights issue of shares on $31$ January $20$X$5.$ Existing shareholders were offered one new share for every five shares held. Delivery vehicles Chandler Co has a policy of replacing delivery vehicles every three years due to the high mileage incurred. The vehicles are normally out delivering orders to customers, which makes physical verification difficult. Requirements: $($a$)$ Describe substantive procedures the auditor should perform to obtain sufficient and appropriate evidence in relation to the matters identified regarding: $($i$)$ Trade receivables; $($ii$)$ Share capital; and $($iii$)$ Delivery vehicles. $(6$ marks$)\text{ }(4$ marks$)\text{ }(6$ marks$)$ The finance director of Chandler Co has just informed you that some large consignments of seasonal produce will have to be written off. The imported goods were held up in customs in May $20$X$5$ due to a lack of documentation and perished in transit. The company's insurance policy will not cover any claim for the loss. $($b$)$ Discuss the issue and describe its potential impact on the auditor's report, if any.

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