QUESTION 3 (11 marks) Described below are three situations that have arisen concerning unrelated external audit clients of Bamsi Alp & Co, an audit firm. The year end in each case is 31 January 2022. Vasilius Closet Sdn. Bhd. (VC) VC is a clothing design company. On 20 February 2022 a liquidator was appointed to Glam Sdn. Bhd. (Glam), a customer of VC. The balance on VC's receivables ledger at 31 January 2022 in respect of Glam was RM695,000. The directors do not believe any adjustments are necessary to the year-end financial statements in respect of this matter as the liquidator was appointed after the year end. The total assets of VC at 31 January 2022 are RM28,250,000 and the profit before tax for the year ended 31 January 2022 is RM6,340,000. Halime Sultan Bhd (HS) The directors of HS have included a note to the financial statements explaining that there are doubts as to whether the business can continue in existence for the foreseeable future. The directors have prepared the financial statements on a going concern basis. The audit partner is aware of the doubts over the going concern status of Ellie and has concluded that the treatment in the financial statements is appropriate. Alya Hatun Sdn. Bhd. (AH) AH replaced its computerised accounting system on 31 March 2021. During the current year audit, multiple errors were discovered affecting a number of material transactions and account balances. The new accounting system was not run in parallel with the previous system and no records from the previous system have been maintained. No alternative audit procedures were available to establish the level of error that may have arisen in the financial statements as a consequence of the replacement system. Required: (a) In each of the situations outlined above, discuss whether the audit firm should modify the auditor's report. Give reasons for your conclusions and outline the modifications, if any, to each auditor's report. Your answer should clearly state whether the audit opinion is modified in each case. (b) State with reasons, the implications for the auditor's report if the directors of HS do not include a note to the financial statements explaining the doubts on the going concern status. (11 marks)