Westinghome Ltd is a large listed company which specialises in the manufacture of whitegoods and other electrical appliances. It is late April 2015 and you are currently planning the 30 June 2015 audit. The auditor's report is due to be signed on 20 July 2015. During your planning, the following independent and material situations come to your attention.

1. On 1 January 2015, Westinghome signed a 3-year contract with KP Pty Ltd for the supply of cardboard packing boxes for its entire range of products. KP was selected as an exclusive supplier after an exhaustive tender process. One of KP's two directors is Ms M, the wife of one of Westinghome's directors, Mr M. Company minutes reveal that Mr M did not take part in either the preparation of the tender documents or the selection of the successful tenderer. You note that details of this contract were omitted from the preliminary list of related party transactions supplied to you by the financial controller.

2. Westinghome introduced a new system for the control of inventory on 1 January 2014. The company performed extensive testing on this new system and management was convinced that it was operating effectively. This system has a utility that can produce many specialised