Nancy is a partner in the audit team. She has recently been appointed as the auditor for Brick Ltd (Brick), which is the parent company of a corporate group in the construction sector. Nancy is very excited about this role as it is her first appointment to an ASX listed company. 

However, as Nancy starts the audit, she realises that Brick has not been including the liabilities of some of its controlled entities in its financial reports. As a result, it has not complied with the Australian accounting standards and its performance appears much better to the market than it would otherwise be. 

She also comes across several irregular and undisclosed payments from Brick to entities connected with Bess' cousin. Bess is refusing to provide Nancy with the materials she needs to check on the payments. Bess 'accidentally' locked Nancy in a storage room when she started to ask her questions about those payments. 

Nancy's is considering going to the Chair of the company's audit committee to see if they can resolve the problems directly. 

Advise Nancy on her rights, obligations and liabilities in respect of this audit.

Answer rating: 100% (QA)

Nancy finds herself in a challenging situation with potential legal and ethical implications As an auditor she has certain rights obligations and liab... View the full answer