How do we deal with subsequent events? 10 You are the manager responsible for the audit of Sunway Group Berhad for the year ended 30 June 201 6. The draft consolidated financial statements recorded revenue of RM200 bil, profit before tax of RM 1.8 bil and total assets of RM380 bil. You noted the following: An overseas subsidiary is being sued by a customer for RM 70mil. The subsidiary auditors obtained verbal confirmation from the legal advisors that the damages are probable, but not virtually certain to be paid, and no provision has been recognised in either the individual or consolidated financial statements No other audit evidence has been obtained by the subsidiary auditors