Audit Report: Produce a draft audit report for the situation described below. Assume that no other situations affecting the audit opinion have arisen. You should be ready to explain and justify each element of your reports.

i. Assume that your analysis of situations relating to contingences expose a high risk relating to contingent liability. You have communicated to the Governing Board, but this particular board fails to take the situation seriously. Evaluate the implications of this on the audit report and opinion.