Q PART 1 The auditing profession 2.24 West & North, CPAs, were the auditors of Southern Development Lid, a real estate company that owned several shopping centres. It was Southern's practice to let each shopping centre manager negotiate that centre's leases; they thought that such an arrangement resulted in much better leases because a local person did the negotiating. Two of the centre managers were killed in a chartered plane accident returning home from a company meeting at the head office in Adelaide. In both cases, the new managers appointed to take their places discovered kickback schemes in operation; the managers had negotiated lower rents than normal in return for kickbacks from the tenants. Southern brought in a new accounting firm, Kompas & Co., to investigate the extent of the fraud at those two locations and the possibility of similar frauds at other centres. Kompas & Co. completed their investigation and found that four locations were involved quite independently of each other and that the total loss over five years was more than $2 million. Southern sued West & North for negligence for $2 million plus interest. REQUIRED What defence would West & North use? What would they have to prove? Online issue thelem on snow eer fadi bebulbous Access the ASIC website at www.asic.gov.au. Select the 'Auditors' navigation button and review the recent releases about auditors and auditing for the last two years. Identify whether the releases are: (1) clarifications of existing law or regulations; or (2) new regulations. Use this