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It is now 30 November 2022 and you are part of your firm's team engaged on the audit of the financial statements of Valu Limited (Valu) for the ear ended 30 September 2022.The company is a new client of your firm and the following points are pertinent to the audit. 1) Valu is a UK retailer with a chain of shops selling jewellery, gem stones and watches. In its early years of trading, the company profited well from the buoyant conditions in the UK economy. In more recent years, it has bucked the trend of poor performance by high street retailers, by combining very effective discounted purchasing activity with some excellent marketing strategies. CRITICALLY explain with justifying rationale as to whether or not the EXPECTATIONS of Valu Limited' directors are reasonable; in the context of external auditors' responsibilities and duties generally with regard to : a) The actions of the previous auditors in refusing to support Valu by representing it in communications with the country's tax authority to repel or mitigate a tax payment demand, in not detecting the directors' fraud; your firm's vigilance to ensure fraud detection, and the requirement for all auditors and your firm to adopt a suspicious approach when obtaining audit evidence, with zero trust in directors. b) The directors working closely in an informal working partnership with your firm for the greater good and prosperity of Valu Limited, your firm placing a high degree of trust in the verbal and written representations of the directors, ignoring business risks faced by the company and attendance by your firm's audit partner at Valu Limited's board of directors' meetings.

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