Advanced Auditing - ACF3003 (5) Question 3 (25 marks) You are the audit manager of Bill Associates, an accountancy firm. You are responsible for the audit of Bewell Care Ltd, a private clinic, for the year ended 30 June 2018. The audit team has already started the audit and you have gone on site to review the work performed to date and to discuss their progress. The senior auditor has brought to your attention the following matters: Bewell has a store which accommodates mainly the of medicines used for different treatments. While performing the review of the valuation of stock of medicines, the audit staff noticed that several medical items have been expired. This matter was addressed to the Store Manager who maintained the store records. All the expired stock items were clearly highlighted in the books and according to the Store Manager, a list of these items was sent the to Finance Manager for necessary actions. The audit team had carried out some audit procedures on these items and they confirmed the expired dates. The senior auditor had drawn the attention of the Finance Manager and asked for explanations. However, the latter denied this information and said that the medicines could be used for treatments. The Finance Manager even asked them to stop their investigation on this matter as it was not within the audit scope. Given the seriousness of this matter, the senior auditor decided to go ahead with the investigation, but the Finance Manager threatened to remove them from the audit. Since then the audit of the medical stock has not remained uncompleted. It has noted also that the expired medical stock items have also disappeared in the store. Required: (a) Identify and explain the ethical and professional issues on the matter arising in Bewell Co Ltd. [13 marks] (b) Critically recommend any actions which should be taken in respect of this matter. [12 marks]