What should be done if directors ignore requests for amendment by the auditor?

When directors ignore requests for amendment by the auditor, it raises significant concerns regarding the integrity of the financial reporting process. The recommended course of action in this situation is to seek legal action, speak at the AGM (Annual General Meeting), or consider resigning.

These actions are appropriate because they help ensure accountability and transparency within the organization's governance structure. Seeking legal action may involve understanding the legal responsibilities and potential liabilities of the directors, as ignoring amendments can lead to misleading financial statements. Speaking at the AGM provides a platform for the auditor to express concerns to shareholders, making them aware of the situation and the potential implications for the company’s financial health. If the issues remain unresolved, resigning can be a necessary step for the auditor to protect their own professional integrity and independence.

Other options would not adequately address the severity of the situation. Ignoring the situation may result in uncorrected errors in the financial statements and a lack of accountability for the directors. Discussing the matter only with shareholders may not be effective if the directors are uncooperative. Postponing the audit report does not resolve the underlying issues and can delay important information from being communicated to stakeholders. Therefore, the recommended approach emphasizes action to uphold the standards of auditing and accountability.