During your subsequent review, you noted the following independent and material items: 1. Shine has been involved in a legal dispute with a competitor for a number of years. The dispute relates to alleged breaches of copyright by Shine. On 25 August, you discovered that Shine had settled the legal action out of court on terms more favourable than expected. 2. In the first week of June, one of Shines debtors informed Shine that it was experiencing serious financial difficulties. On 7 August, Shine was informed that the debtor had gone into receivership. Preliminary reports suggest Shine will recover only 20 cents in the dollar of the outstanding debt. 3. On 30 August, the Bureau of Meteorology (BoM) issued a cyclone warning for parts of North Queensland. Shine has a large sugarcane plantation in this area. On 2 September, the cyclone hit, wiping out about 90% of the crop

4. Shines bank loan is conditional upon certain ratios being maintained at all times. On 20 September, you discovered that one of the ratios was breached for a 24-hour period on 18 September. 5. On 10 August, one of Shines major product lines developed a fault that rendered the product unusable. Shine became aware of the fault on 30 August. Although the fault posed no safety risks to consumers, Shine decided to launch a full product recall on the same day. Required: (a) For each of the events described above (1-5), select the appropriate action from the list below, and justify your response. A. Adjust the 30 June 2021 Financial Report. B. Disclose the information in the Notes to the 30 June 2021 Financial Report. C. Request that the client recall the 30 June 2021 Financial Report for revision. D. No action is required. (5*2.5= 12.5 marks) (b) If no action is taken by management for each of