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Ramzee Company faces the possibility of legal charges against its Chief Operating Officer (COO) who...

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Accounting

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Ramzee Company faces the possibility of legal charges against its Chief Operating Officer (COO) who has recently approved selling outdated clothes under a different brand name to lower income countries. This has not only brought bad publicity to the company, but the share price has also dropped significantly. The shareholders blame the auditors for having overlooked the dealings of the COO and not being honest in their opinion of the company, (a) Identify the stakeholders who would be impacted by the above act of the COO. (1 mark) (b) Explain why the shareholders are blaming the auditors. (2 mark (c) How should the auditors respond to the bad publicity and blame from the shareholders? Should they go beyond statutory reporting duties and investigate the accusations against the COO? Explain why or why not

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