Please help me answer these case studies
Case 1: Ethical Issues The following involve Lola Payne, an audit senior with the Accounting firm of Joyce dc Mark. She is involved with the audit of Dockland Ferries Ltd {Dockland}. l. The assistant accountant of Dockland resigned 6 months ago and has not been replaced. As a result. Dockland's transactions have not been recorded and the accounting records are not up to date. To comply with the terms of a loan agreement, Dockland needs to prepare interim nancial statements but cannot do so until the records are up to date. The managing director ofDockland wants Lola to help them out because she perfonued the audit last year. The audit partner of Joyce at Mark allows Dockland to use her for 1 month before the start of the annual audit. 2. During the MI audit of Dockland, Lola discovers Dockland had materially misstated prot after tax on the previous year's tax renrm. The client is unwilling to take corrective action. Lola decides to inform the taxation ofce. 3. (in completion of eldwork of the audit of Dockland, Lola is offered a six 'ee ferry tickets by the managing director, He tells her this gesture is meant to show his appreciation of a job well done. Lola accepts the tickets. 4. The partner of Joyce dc Mark is not pleased with the time Dockland is taking to pay its audit fee for the year. He decides to take $5,t}[i out of a trust frmd that Joyce tit Mark holds for Dockland. He intends to replace it as soon as the company pays its audit fees. Required For each of the previous four situations, - identify the ethical issues involved, and - discuss whether there has been any violation of ethical conduct. Support your answers by reference to the relevant professional statements- Case 2: Liability to the shareholders and the company Maxref ltd is a new dot.com company specialising in online trading in multimedia items such as DVDs. Music, enline reports, and celebrity commodities- It has been listed on the Australian Securities Exchange since last year. As auditor ot' Maxie? s rst year's financial statements for the year ended 30 June 2009, you note that the accounts show a turnover of about tilt} million, shareholder's funds of $2 million. and a prot before tax of $250,0t}. During the course of your audit you discover that the balance of the sales ledger centre] account is SSDDJJIJD and that about seas of the accounts receivable are From new customers who bought items online without ill details of\" the banking particulars. You tbrther discover that all online transactions were reported and executed without proper security checks. Moreover, half of the items listed as stock for sale cannot be located. The share price of the company stands at $1.50. You raise the issue with the director of\" Maxret' and he tells you that this is no unconnnon with this type of e-business and that he is concerned only that the Australian Securities Exchange allows it to go on trading. He assures you that nothing major will happen; an unqualied auditor's report its all that is necessary. However, you are worried about your own ability. Required: Discuss the potential liability of the auditor to: - the shareholders - the company
