We have now moved forward in time to January 26, 2022. Since we are auditing only 6 months of results, the audit has not taken as long as a full year audit.

Danielle plans to sign the audit report on February 12 and Zeroco would like to release their financial report to shareholders on February 15.

Zeroco's model relies on customers sending back empty pouches to be refilled. To date, the refill process is still in development. As per the Zeroco offer document, they have cleaned 10,000 pouches, refilled a smaller sample of 500 and sent them for testing at the lab to ensure that they are not contaminated in any way. Some of these pouches have been sent to customers agreeing to take part in a trial for feedback and approval.

This process requires 2 newly designed machines:

- Machine to clean used pouches

- Machine to sterilise used pouches

And also quality assurance processes along the production line.

It is January 26, 2022 and while working at the client offices - you hear a lot of commotion in the hallway. The production facility is close by to the office you've been assigned as the auditor - you go outside and hear sirens blaring, red lights flashing and lots of shouting. The sirens get louder as you see an ambulance pull into the warehouse. Staff are taping off an area and you see a staff member being loaded into the ambulance.

It appears that the cleaning and sterilising machine malfunctioned and caused a staff member injury. You see someone from SafeWork NSW sign in at reception. They go into a meeting with the executives of Zeroco for a few hours. Afterwards, you receive information that these 2 new machines will be offline (not in use) for at least 3 months while an investigation and safety checks take place.

What should you do as the auditor in this instance? What recommendations would you make to the Chief Financial Officer Alana Burton about their financial statements? Discuss and include references to support your decision. referencing to ASA560.6-8