For each of the following situations, decide which audit report you, as auditor, would give. Following on from the explanation above, your choices are:

► a clean report

► an ‘except for’ report

► a ‘the accounts do not show a true and fair view’ report.

1 The inclusion of a material debt from a company that is known to be in liquidation.

2 A fraud involving £1,800 is discovered in a large public company.

3 Controls over the cash accounting system were found to be non-existent, and records incompletely kept, so that there was no way of verifying the amount of cash sales included in the accounts.

4 In a supermarket chain, stock has been valued at selling price, which is very much higher than cost.