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Dear tutor
I am not sure what this question requested, ethics? audit risk? it says “discuss audit implications and further action”, so what audit implication exactly mean?
Many thanks
It means any implication for the audit – so that could be ethical, quality control, “practice management”, an implication for a current audit/completed audit/future audit – whatever is indicated by the information provided.
Implication are what need to be considered – actions are then how to respond to the implications.
So as you read through the short scenario you need to brainstorm – “what does this mean for the audit/partner/practice”?
For example “these chemicals are prohibited” should immediately ring bells – prohibited by what? (presumably law/regulation) – so what are the NOCLAR considerations? …
Then there’s a clear suggestion of bribery …Then, as you have been asked to brief the partner on the e-mail, you can presume this has only recently been received – what does it “say” that is relevant to your current task of planning the audit? Has audit risk/RoMM increased? This is the first mention of use of prohibited chemicals – so unrecorded fines/penalities etc increases RoMM (unrecorded liabilities/undisclosed contingent liabilities).
Write 10 well-thought-about sensible and relevant sentences – and you should have no trouble to pass this part of the question.
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