Massive Motors Ltd (MM) is part of the Massive Group plc, which has a consolidated turnover of £200 million. MM operates a chain of garages throughout the UK which sell petrol and carry out repairs and services.

Three of the garages also deal in new and second-hand cars. MM is a UK dealer for Eagle cars, which are imported from Ruthenia. Its year-end is 31 March.

Jill White is the audit partner in charge of the MM audit. The 19X8 audit fieldwork has just been completed, and Jill is reviewing the file in order to establish whether any additional work needs to be done and to identify matters for discussion with MM’s financial director at their closing audit meeting, which is due to be held tomorrow.................

QUESTIONS FOR DISCUSSION
1. Identify the issues in these working papers which might be described as:

(a) post-balance sheet events;

(b) commitments;

(c) contingencies.
2. For each issue, comment on:

(a) the accounting treatment/disclosure proposed by MM. Do you consider it to be correct? If not, what treatment/disclosure would you suggest?

(b) the audit work done. Is it adequate? If not, what additional work do you consider necessary?