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You are in the process of auditing the financial statements of Miracle Investments in respect of the year ended $31$January, $2024.$ The partner in charge of the audit instructs you to carry out a review of the company's activities since the financial year end.

The current Chief Executive of Miracle Investments, Mr Maine, was appointed just before the year$-$end. The previous Chief Executive, Mr Jones, left the company suddenly following a decision by the Board to terminate his contract for unknown reasons. Miracle paid him compensation of $100,000$ on $10$ January, $2024.$

As a result of your post$-$balance sheet work which included reviewing company correspondence, you uncover evidence suggesting that the company is to be sued by Mr Jones for unfair dismissal. When you approach Mr Maine to discuss the issue he is very angry and accuses you of interfering in sensitive company matters that are not relevant to the audit of the financial statements. He refuses to give you access to the minutes of directors' meetings since the year end or to permit any communication with the company's solicitor.

Required:

$($a$)$ Detail the risks associated with the evidence discovered concerning Mr Jones and the reaction of Mr Maine. What action should you take as auditors in response to the situation and what is the potential effect on the audit report?

$($b$)$ Explain the auditor's responsibilities in respect of the post balance sheet events and why the auditor is interested in non$-$financial information and company activities after the year end.

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