Auditing & Professional Practice

(a) The auditors of Bristow Ltd were refused access to six months of the minutes of the directors' meetings (held monthly) because they contained discussions of a highly confidential matter. No alternative procedures could be performed.

(b) Due to the recent downturn in the Australian economy, Staple Ltd has made substantial losses for the last three quarters and now has a negative working capital balance. The auditor of Staple Ltd has concerns about the entity's ability to continue as a going concern in the short to medium term. Management of the company believe that the company is fully solvent and therefore have not disclosed these matters in the financial statements.

(c) Cisco Ltd has reported a net profit after tax of $5m, which represents an increase of 25% over the previous year's profit figure. The Directors' Report however, incorrectly states that net profit has increased by more than 40% from the prior year's figure. As the annual report has been printed, the directors are not prepared to correct the error.