Consider each of the following independent and material situations. In each case:

the financial report date is 30 June 2019;

the field work was completed on 12 August 2019;

the Directors' Declaration and the Audit report were signed on 19 August 2019;

the completed financial report accompanied by the signed Audit report were mailed to the shareholders on 18 September 2019.

(i)You are an auditor of KK Limited (KK), a company specialising in industrial property development.On 10 August 2019, you become aware that a major overseas investor has informed the management of KK of their intention to withdraw their investment in a proposed major development. Based on its discussions with the investor and previously pledged funds from them, KK has incurred substantial costs in feasibility studies, structural engineering reports and architectural plans. A significant portion of these costs have been capitalised. The management is dependent on finding a new investor to be able to meet these expenses and to continue with the project.

Required:

1.For each of the events described above , select the appropriate action from the list below, and justify your response.

A.Adjust the 30 June 2019 financial report.

B.Disclose the information in the notes to the 30 June 2019 financial report.

C.Request that the client recall the 30 June 2019 financial report for revision.

D.No action is required.

2.If no action is taken by management for each of the events described above (i-iii), determine the most appropriate audit opinion to be issued.