Question 6 Audit Report Before the audit report was signed, the audit team encountered the following situation. Treat each situatiOn independently and assume the remaining nancial statements are ne. 1) A property owned by Cook's Furniture Ltd was sold to Lidia Preston, the wife of Howard Cook in June 2020 (refer to case description in part A). The property has a market value of four million and was sold at 3.2 million. Management did not disclose this in the nancial statement because they believed this was a private matter. The disposal of this asset has been appropriately accounted for on the nancial statements (e. g. the asset was removed from PPE and the loss of disposal was correctly recognised as an expense). 2) The subsequent selling price of the ready-made furniture range suggests the inventory valuation as at 30 June 2020 should be written down by $48,000 but management only wrote $38,000 off as per the nancial statements because they were condent that they can increase the selling price again in 2021 after people settling back to normality. 3) Carl Cook decided to retire in 2021 due to health reasons, Carl is willing to sell his shareholding to the remaining shareholders. However, the BoD decided to explore the potential of selling the business. By the time to sign the 2020 nancial statements, the company has not commenced a negotiation with any potential buyer. The BoD said to the auditor that they may not sell the business if they cannot get a good deal. Carl's retirement decision is disclosed on the nancial statements, but not the intention to sell the business