Best Textiles Ltd. makes an investment in Prime Textiles Ltd. with a view to expand its business, capture more market share and to earn higher…

(a) Preconditions for Accepting Review Engagement As per SRE: As per SRE 2400, Engagement to Review Historical Financial Statements, the preconditions for accepting a review engagement are: (1) Determine whether the financial reporting framework applied in the preparation of the financial statements is acceptable including, in the case of special purpose financial statements, obtaining an understanding of the purpose for which the financial statements are prepared and of the intended users, and; (2) Obtain the agreement of management that it acknowledges and understands its responsibilities: (i) For the preparation of the financial statements in accordance with the applicable financial reporting framework, including, where relevant, their fair presentation. (ii) For such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error; and To provide the practitioner with: (a) Access to all information of which management is aware that is relevant to the preparation of the financial statements, such as records, documentation and other matters; (b) Additional information that the practitioner may request from management for the purpose of the review; and (c) Unrestricted access to persons within the entity from whom the practitioner determines it necessary to obtain evidence.