1) Mr Kristos Le Droit in one of his first actions as the newly elected treasurer of LOACH (a mid-sized Charity) has dismissed the incumbent (current) audit firm and called for tenders for a new audit firm. Several other members of the Charity’s Board are very upset and informed Mr Le Droit that the incumbent firm had been auditing them for 15 years, that everyone working at the Charity was very comfortable with that firm as the auditor, and that they were very worried about the mess that might be disclosed if a less friendly firm were appointed.
Required: Please evaluate and explain to Mr Kristos Le Droit (the new treasurer of LOACH) what was right and what was wrong in the above action.
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