Summer Minerals is being audited by your firm for the first time in 2020. In 2015, Summer Minerals invested in a mining joint venture in Capot, a country which recently experienced significant currency devaluation. In December 2018, there was a large chemical spill in the area surrounding the main centre of Summer Minerals’ operations in Capot, and the government is seeking compensation and asking for restoration work to be done. The story has been covered in the Australian press. In a review of documents you discover that in 2019, there was a raid on the homes of several Summer Minerals’ employees, following a tip-off to police. The tip-off alleged that over several years, four members of Summer Minerals mechanical staff had been stealing small tools from Summer Minerals and re-selling them. To date, four members of Summer Minerals’ staff have been charged with fraud and theft. You are aware that the Chief Operations Officer (COO) of Summer Minerals resigned at the start of 2020 and a suitable replacement has not yet been found.

Required: Discuss the impact of the background material for Summer Minerals on your likely assessment of entity-wide controls (control environment) at Summer Minerals.

Answer rating: 100% (QA)

The information suggests that there square measure issues with the clients management atmosphere sur... View the full answer