You are responsible for conducting an audit of a company listed on Bursa Malaysia, Lelabu Bhd, which has five wholly-owned subsidiaries. For the year ended 31 December 2018, Lelabu Bhd and the Group each reported a total loss RM14 million and RM20 million with current liabilities exceeding current assets by RM23 million and RM45 million. Several subsidiaries of Lelabu Bhd were reported to have defaulted repayment of bank debts. Kumpulan Lelabu Bhd is currently in the final stages of negotiations proposed restructuring of bank debt repayment which is part of the company's strategic plan to be submitted for Securities Commission approval and other enforcement bodies. The ability of Kumpulan Lelabu Bhd continues to operate as an ongoing effort depends on the approval and successful implementation of the plan. 

Be required: 

a) The above information indicates that Lelabu Bhd may have a problem for resume operations. Discuss further actions you should take as auditor of the company. 

b) If the majority of shareholders and the bank refuse to approve the plan structuring proposed by the management of Lelabu Bhd, state and explain the type of audit report you will issue.

Answer rating: 100% (QA)

1 After analyzing the existing conditions and events in aggregate the auditor believes that there is ... View the full answer