$($b$)$ Dasset Co operates in the coal mining industry. The company owns ten mines across the country from which coal is extracted before being sold onto customers who are energy providers. Coal mining companies operate under licence from the National Coal Mining Authority, an organisation which monitors the environmental impact of coal mining

operations, and requires coal mines to be operated in compliance with strict health and safety regulations.

You are an audit manager in Burton & Co$,$ responsible for the audit of Dasset Co and you are reviewing the audit working papers for the year ended $31$ August $2013.$ The draft financial statements recognise profit before tax of $$18$ million and total assets of $$175$ million. The audit senior has left a note for your attention:

Accident at the Ledge Hill Mine

On $15$ August $2013,$ there was an accident at the Ledge Hill Mine, where several of the tunnels in the mine collapsed, causing other tunnels to become flooded. This has resulted in one$-$third of the mine becoming inaccessible and for safety reasons, the tunnels will be permanently closed. However, Dasset Co$$s management thinks that the rest of the

mine can remain operational, as long as improvements are made to ensure that the mine meets health and safety regulations.

Luckily no one was injured in the accident. However, the collapse caused subsidence which has damaged several residential properties in a village located above the mine. A surveyor has been commissioned to report on whether the properties need to be demolished or whether they can be safely repaired. A group of $20$ residents has been relocated to rental properties in the local area and Dasset Co is meeting all expenses in relation to this.

The Ledge Hill Mine was acquired several years ago and is recognised in the draft statement of financial position at $$10$ million. As no employees were injured in the accident, Dasset Co$$s management has decided not to report the accident to the National Coal Mining Authority

Required:

In relation to management$$s decision not to report the accident to the National Coal Mining Authority, discuss Burton & Co$$s responsibilities and recommend the actions which should be taken by the firm. $(6$ marks$).$