For each requirement, generally 1 mark for each matter discussed:

Plover Co

– Potential breach of law and regulations
– Further understanding to be obtained
– Consider potential impact on financial statements
– Discuss with those charged with governance
– Management should disclose to relevant regulatory body
– Auditor could disclose in public interest
– Issues with confidentiality 
– Take legal advice
– Extend audit work in relation to the legal claim
– Risk of material misstatement
– Consider integrity of audit client

Maximum marks 7