Question 44 (15 marks) The auditor is auditing financial statements for the year ended 31 December 2012 and is completing the audit in early March 2013. The following situations have come to the auditor's attention: a. On 12 February 2013, the client agreed to an out-of-court settlement of a property damage suit resulting from an accident caused by one of its delivery trucks. The accident occurred on 20 November 2012. An estimated loss of S30 000 was accrued in the 2012 financial report. The settlement was for $50 000. b. Same facts as in part (a), except the accident occurred I January 2013 and no loss was accrued. c. The client is a bank. A major commercial loan customer filed for bankruptcy on 26 February 2013. The bankruptcy was caused hy an adverse court decision on 15 February 2013 involving a product liability lawsuit initiated in 2012 arising from products sold in 2010.