Auditor of Sunshine Ltd. is of the view that due to greater management intervention to specify accounting treatment, the risk of material…

(a) Risk of Material Misstatement – Greater for Significant Non-Routine Transactions: Significant risks often relate to significant non- routine transactions or judgmental matters. Non-routine transactions are transactions that are unusual, due to either size or nature, and that therefore occur infrequently. Risks of material misstatement may be greater for significant non-routine transactions arising from matters such as the following: (a) Greater management intervention to specify the accounting treatment. (b) Greater manual intervention for data collection and processing. (c) Complex calculations or accounting principles. (d) The nature of non-routine transactions, which may make it difficult for the entity to implement effective controls over the risks. Keeping in view above, view of Auditor of Sunshine Ltd is correct.