(a) Outline two objectives of the auditor with respect to their communication of audit matters with those charged with governance. (2 marks)

(b) You are the auditor of Home Buyers Ltd for the year ended 30 June 2019. You have identified a material misstatement of the property, plant and equipment account. Home Buyers has not changed its depreciation rates for the past four years. However, recent technological changes in the industry have convinced you that the useful lives of Home Buyers' assets need to be adjusted downwards, resulting in an increased depreciation charge. Home Buyers 's management have refused to update any change to the depreciation rates, despite you explaining that this will put them in breach of the requirements regarding impairment tests contained in AASB. Explain the auditor's opinion you would issue for Home Buyers for the year ended 30 June 2019. (3 marks)

(c) JJ King Ltd is a builder company with a varying job contract. In order to compensate for the irregularity of its contracted building projects, JJ King also purchases large vacant blocks of land that it later subdivides for the construction of houses and units. JJ King then sells these on its own account. Your analysis strongly suggests that the apportionment of costs to houses and units sold has been kept low in order to boost profits. In your opinion, this has resulted in the overvaluation of the unsold properties. The directors of the company do not agree, and hold to their view that the stock of properties is correctly valued. Explain the auditor's opinion you would issue for JJ King Ltd. (3 marks)

(d) You are the auditor of Bloomberg Ltd. for the year ended 30 June 2018. While completing your audit and finalising your auditor's report, you discover that the company has incorrectly stated in the chairperson's review of operations that Bloomberg has complied with environmental guidelines regarding its carbon emissions. Non-compliance with these guidelines was investigated during the audit and it was noted (in a conversation with a junior manager) that Bloomberg's emissions were significantly above compliance standards. There is currently no financial implication for non-compliance, so no further action was taken. You believe, however, that the statement in the annual report will affect the perception of readers of the annual report regarding the company's entitlement to future environmental incentives. This information is likely to lead to a material adjustment of Bloomberg's share price.

Explain what action would you take in regard to the above situation? (3 marks)