Homework answers / question archive / You are an audit associate of KEP Assurance LLP performing the audit for ABC Pte Ltd

You are an audit associate of KEP Assurance LLP performing the audit for ABC Pte Ltd

Accounting

Share With

You are an audit associate of KEP Assurance LLP performing the audit for ABC Pte Ltd. You discover that ABC’s cash balance is only $100,000 and a major customer has gone bankrupt. There is a bond of $1m that is redeemable within six months after the financial year-end. The audit manager has agreed with the CEO of ABC Ltd not to disclose this matter as doing so will alarm the bond holders. The audit manager has reminded you that ABC is a very important audit client and it is best not to upset the CEO.
Required:
(a) Identify the ethical dilemma you face in relation to ABC Pte Ltd’s going concern uncertainty disclosure.
(b) ProposeTWOpossiblecoursesofactionthatyoucouldtakeandindicatethefundamental principle or principles involved.
(c) Based on your proposed courses of action in (b) above, suggest what is the most appropriate course of action in this situation