(d) Impact of email on audit

Up to 2 marks for each well explained point:
– Use of chemicals likely to be a breach of laws and regulations
– Bribe indicates lack of integrity and that the activity is a non-compliance
– Auditor needs to understand laws and regulations applicable to the Group
– Further evidence should be obtained and the matter discussed with management
– Issue of lack of ‘higher authority’ as Margot Co is family owned and need to take legal advice
– Provisions for fines and penalties
– Valuation of inventory and biological assets
– Potential going concern issue due to bad publicity and impact on reputation
– Auditor may have a legal duty to disclose, or consider disclosing in the public interest
– Discussion of how requirements NOCLAR relate to the scenario
– The audit firm may wish to seek legal advice regarding the situation (1 mark)

Maximum marks 10
Professional marks

Generally 1 mark for heading, 1 mark for introduction, 1 mark for use of headings within the briefing notes, 1 mark for clarity of comments made.

Maximum marks 4 –––