While observing inventory at Remote Inc. a staff auditor determined that the client has removed P4.2 million of inventory from the books during the year. The adjustment was material to the financial statements and was made because the auditor had expressed concern about the client's ability to sell inventory, a hazardous chemical compound. A warehouse attendant explain that the chemical had begun to eat through the metal drums in which it was stored, and that the company had placed it in a ravine and covered it with dirt. Recently the municipal government concluded that disposal of the chemical compound met its standards. However, the agent performing the investigation explained that he would not drink water from the well on the property. He indicated that cows kept on nearby property has recently been tested, and the tests had shown traces of this hazardous chemical. Since that time, Remote has used only bottled drinking water. The warehouse attendant expressed concern the pollution might reach the surrounding lakes. Required: a. Are ethical issues involved in this case? b. What responsibilities, if any, does an auditor have for matters such as this?