BSF was incorporated in 1995 and is currently listed on the Australian Stock Exchange. The company is primarily engaged in carrying out extensive research for developing sustainable aquaculture feeds. The company has tested different plant-based, fish-based and bacteria-based methods for production of aquaculture feeds. The results of the first two types research failed to thrive so the company is now considering to invest heavily in the bacteria-based feeds which is likely to produce the expected yield.
The company is currently investing heavily in the research and development of patents which will allow it to reap the benefits from the sale of bacteria-based feed in the market after 2 years. The company has also received grants from the government for investing in research activities relating to alternative aquaculture feeds. Therefore, the company has also made commitments to comply with the grant terms and conditions.
The audit for the company would be conducted in the light of the above key information which provides guidance in defining the key risk areas and the likelihood of the existence of risk that the financial statements may be materially misstated.