Question
QUESTION ONE The following are independent situations: (i) The audit of Zaxxon Ltd was extremely difficult this year as the client did not keep appropriate
QUESTION ONE
The following are independent situations:
(i) The audit of Zaxxon Ltd 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. As the auditor you are not satisfied that all transactions that occurred during the year are reflected in the financial report.
(ii) Patty has been the engagement partner on the Mt. High Limited audit for several years. Some time ago, Mt. High's long-standing company secretary retired, and Mt. High took six months to find a replacement. At Mt. High's request, Patty performed company secretarial duties for this period.
REQUIRED:
(a) List any professional standards and regulatory requirements breached; and
(b) Discuss possible alternative courses of action the auditor should have taken in order to properly discharge their professional responsibilities.
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