Consider cach of the following independen und ineluriul silualions. In cacti case: the financial report date is December 2019; the tield work was completed on 12 February 20%0; the dice lors decluration and the audil report WCIC Signcu on 19 February 2020; und the completed tinancial report accompanied by the signed audit report were mailed to shareholders on 10 Murci 2020 1. You are an auditor pt AB limited (AB), a company specialising in industrial property development. On 10th January 2019. AB puretlused properly and entered into a contract lo develop a showing complex and then sell the developed real estate to an unrelated third party for a frost-plus' settlement price. Following lic sale on 20th Oclubct 2019, an economic recession resulted in the rentals and excupancy rales being well below forecasts prepared by your client. On 10th January 2020, the purchaser threatened to sue for dumuges, ulloying they rclicu on your client AB's Conceusts when entering into the comivel. The amount or damages being claimed is highly material to your client. You have obtained an opinion from a well-known Senior Counsel ( Swo concludes thul dumuges are likely to be puyable. 2 You are the auditor of Australian Paper Limild IAPL). A division of APL prints and publishes books about celebrities. A large print run of a scandal packed book titled "The Secret lite of Brickley Cooper' was produced in Junuary 2020. As of 31st December 2015, slocks of tow malcriuls were wound one third higher than usual, as the division purchasen extra materials in order to produce this book on 20th March 2020, Brickley Cooper was killed in tragic circumstances while rescuing u young child from a burning house. API pulpen the book on 25th March 2020, atter receiving advice that selling the hook following Drickley Cooper's liuyi und heroic death would result in a sercie public bucklash. 3. Youaretheauditootciscol imited(Cisco),aprostessionalservicesclient.Onth Cebruary 2020, CISCO settled und paid a personal injury claim to a forine Crnployucus a result of an accident that occurred in December 2016. GISCO had not previously recorded a liability for the claim. 4. You are all vuditor of UK limited (JK), a mujor public company involved in the properly development industry. Prior to signing your audit report you sought a letter of comtort from.K's bankers that the bank would continue lo support UK by providing linunce over the coming year. The bunk ugrces that it would continue to provide finance. It was your view that without such support JK har severe cash tiow problems und the financial reporl would need lo ve modified with respect to u going concemn assumplion. On both March 2020, the company's bankers wrote to you advising that the company had breached its loan covenant with the bank in Februry 2020 und that the loan facilily was now due and puyable and would not be renewer. 5. You are the auditor of Absolule Wonder Linuiled (AWL). AWL holus investments in several companies listed on the long Kong stock exchange. On 10th February 2020, the exchange's value plummets by 30 per Required For each of the events A to E: 1. Outline the required treatment in the financial report, if any. Justify your answer. (5 X 2 Marks = 10 Marks) 2. Determine whether additional audit evidence needs to be obtained. If so, describe the nature of the audit evidence to be obtained and the audit procedures used to obtain it. (5 X 2 Marks = 10 Marks) 3. If no action is taken by management, determine the most appropriate audit opinion to be issued. (5 X 2 Marks = 10 Marks) Consider cach of the following independen und ineluriul silualions. In cacti case: the financial report date is December 2019; the tield work was completed on 12 February 20%0; the dice lors decluration and the audil report WCIC Signcu on 19 February 2020; und the completed tinancial report accompanied by the signed audit report were mailed to shareholders on 10 Murci 2020 1. You are an auditor pt AB limited (AB), a company specialising in industrial property development. On 10th January 2019. AB puretlused properly and entered into a contract lo develop a showing complex and then sell the developed real estate to an unrelated third party for a frost-plus' settlement price. Following lic sale on 20th Oclubct 2019, an economic recession resulted in the rentals and excupancy rales being well below forecasts prepared by your client. On 10th January 2020, the purchaser threatened to sue for dumuges, ulloying they rclicu on your client AB's Conceusts when entering into the comivel. The amount or damages being claimed is highly material to your client. You have obtained an opinion from a well-known Senior Counsel ( Swo concludes thul dumuges are likely to be puyable. 2 You are the auditor of Australian Paper Limild IAPL). A division of APL prints and publishes books about celebrities. A large print run of a scandal packed book titled "The Secret lite of Brickley Cooper' was produced in Junuary 2020. As of 31st December 2015, slocks of tow malcriuls were wound one third higher than usual, as the division purchasen extra materials in order to produce this book on 20th March 2020, Brickley Cooper was killed in tragic circumstances while rescuing u young child from a burning house. API pulpen the book on 25th March 2020, atter receiving advice that selling the hook following Drickley Cooper's liuyi und heroic death would result in a sercie public bucklash. 3. Youaretheauditootciscol imited(Cisco),aprostessionalservicesclient.Onth Cebruary 2020, CISCO settled und paid a personal injury claim to a forine Crnployucus a result of an accident that occurred in December 2016. GISCO had not previously recorded a liability for the claim. 4. You are all vuditor of UK limited (JK), a mujor public company involved in the properly development industry. Prior to signing your audit report you sought a letter of comtort from.K's bankers that the bank would continue lo support UK by providing linunce over the coming year. The bunk ugrces that it would continue to provide finance. It was your view that without such support JK har severe cash tiow problems und the financial reporl would need lo ve modified with respect to u going concemn assumplion. On both March 2020, the company's bankers wrote to you advising that the company had breached its loan covenant with the bank in Februry 2020 und that the loan facilily was now due and puyable and would not be renewer. 5. You are the auditor of Absolule Wonder Linuiled (AWL). AWL holus investments in several companies listed on the long Kong stock exchange. On 10th February 2020, the exchange's value plummets by 30 per Required For each of the events A to E: 1. Outline the required treatment in the financial report, if any. Justify your answer. (5 X 2 Marks = 10 Marks) 2. Determine whether additional audit evidence needs to be obtained. If so, describe the nature of the audit evidence to be obtained and the audit procedures used to obtain it. (5 X 2 Marks = 10 Marks) 3. If no action is taken by management, determine the most appropriate audit opinion to be issued. (5 X 2 Marks = 10 Marks)