title: Principles of Auditing

1. Read the following case carefully and answer the given questions. The Accounts clerk of Al-Izz Company resigned two months ago and has not been replaced. As a result, Al-Izz's transactions have not been recorded and the books are not up to date. To comply with the terms of loan agreement, Al-Izz Company needs to prepare interim financial statements but cannot do so until the books are posted. The managing director of Al-Izz Company wants Ms. Ahlam Al-Qasmi an audit senior with Al-Maha Audit Company to help them out because she performed the audit last year. So she provided her services for one month before the start of the annual audit. During the annual audit of Al-Izz Company, Ms. Ahlam discovered that the company has materially understated net income on last year's tax return. The client is unwilling to take corrective action. Ms. Ahlam decides to inform Taxation Authority in Oman. On completion of the fieldwork of the audit of Al Izz Company, Ms. Ahlam accepted 2 travel tickets to Paris which were offered by the manager of this company to appreciate her well done job. c. How does Ms. Ahlam manage the situation