Your firm has been engaged by the directors of Zip (Pty) Ltd a construction company, to review a set of financial statements for the 12 months ended 30 June 2011. This is a first-time engagement. The financial statements are required by the company's the Companies Act, 2008 and the bank and must be drawn up in terms of the IFRS for SMEs. You were not the reviewer of Zip (Pty) Ltd for the year-end review 30 June 2010, but you contacted the existing reviewers (with the permission of Zip (Pty) Ltd) who indicated that there would be no problems with you accepting the review engagement. Your review consisted primarily of analytical reviews and discussion with management. During your review it became apparent that the company had taken into account in the income statement, all of the expected profit on a contract the company had signed shortly before the end of June to erect a luxury hotel. When you approach the directors, they confirm that they have indeed taken the profit into account. The financial director, Ben Down informs you that this contract is the seventh hotel built for the Livya Sun hotel group. All the hotels have been built to the same specifications and Zip (Pty) Ltd has made their budgeted profit on each. For this reason, the directors have decided to abandon the method which they had adopted in the past for recognizing profit and to take profit on the signing of the contract. The profit however, has not been included in the taxation calculation. The directors decide to depart from IFRS for SME. Briefly discuss your duties in terms of the above.