PLEASE FIND THE ATTACHED QUESTION

Part B: Audit Reporting [15 marks] The following are independent situations relating to the year ended 30 June 2008. Assume all entities are reporting entities and that all situations are material. The depreciation rates used by Langer Lid have not changed for the past 3 years. Given recent technological changes in the industry in which it operates, you are convinced the useful lives of Langer's assets need to be adjusted downwards. The directors refuse to make this change despite the fact that you have explained, this places them in breach of impairment tests contained in approved accounting standards. ii) You are finalizing the audit of Jones Limited, a large proprietary company which exports grains and cereals to most regions of the world. Subsequent to balance date, regional tensions in the Middle East saw orders plummet by over 40%. The fall in profit placed Jones in breach of the conditions of its bank loan. Not wishing to risk losing its money, the Bank placed a freeze on Jone's bank account and other assets, rendering Jones Limited unable to trade. These circumstances are adequately disclosed in a note to the accounts. iii) The audit of Waugh Limited was extremely difficult this year as the client did not keep appropriate books and records. The accounting department was chronically understaffed, so transactions were not promptly entered and reconciliations not performed. A temporary accountant was employed to help sort out the mess but was unable even to reconcile the bank account at year end. You are not satisfied that all transactions that occurred during the year are reflected in the financial report. iv) You have received the draft annual report from Hayden Club Limited. On reading the *Year in Review' you note the club chairman states that revenues increased by 150%. On checking the accuracy of this information you note that revenues have actually fallen by 10%. The club refuses to change anything in the annual report for fear of missing printing deadlines. Required: a) For each situation (i) to (iv) above, describe the additional audit procedures you would perform prior to issuing your audit report. [8 marks] Assuming the matters remain unresolved, discuss the audit opinion you intend to issue for each of the above entities for the year ended 30 June 2008. [4 marks] c) What are the auditor's responsibilities for reporting business risk factors and material weaknesses in internal control? [3 marks]