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QUESTION 1 You are auditing the financial statements of One-Dam Engineering for the year ended 31 December. The partner in charge of the audit instructs you to carry out a review of the company's activities since the financial year end. Mrs.Addo, the Chief Executive Officer (CEO) of One-Dam Engineering overhears the conversation with the partner and is surprised that you are examining accounting information which relates to the next accounting period. Mrs. Addo was appointed on 1* December as a result of which the contract of the previous CEO, Mrs. Mahama, was terminated. Compensation of GHS100,000 had been paid to Mrs. Mahama on 2nd December As a result of your investigations, you find that the company is going to bring an action against Mrs. Mahama for the recovery of the compensation paid to her, as it had come to light that two months prior to her dismissal, she had contractually agreed to join the board of director of a rival company The company's lawyer, Mr. Lawson, has informed One-Dam Engineering that Mrs. Mahama's actions constituted a breach of her contract with them and that an action could be brought against the former CEO, Mrs. Mahama, for the recovery of the moneys paid to her. Required: a) Explain three (3) events that will require adjustment by the auditor in the financial statements after the balance sheet date to the date of signing the audit report. (6 marks) b) Explain three (3) events that will require disclosure by the auditor in the financial statements after the balance sheet date to the date of signing the audit report. (6 marks) c) Discuss the audit implications of the company's decision to sue Mrs. Mahama for the recovery of the compensation paid to him. (8 marks) Total = 20 marks) QUESTION 2 a) State five (5) audit professional ethical issues that are required of the auditor in ensuring independence and assurance of engagement

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