Question 1 The following are independent situations relating to the year ended 30 June EDTE. Assume rd I entities are reporting entities and that all situations are material. |. You are the auditor of Fine Trmher Limited {Fine Timber] a maior furniture manufacturer in Malaysia. Fine 'I'rmloer intends to upgrade its manufacturing processes and plans to finance the upgrade from the sate proceeds of a property which is superuous to its needs. The property was subdivided, made ready for sale and ptaced on the market in May Eti'r'. {in l? Juiy Eti'r' the state government approved plans for the construction of a maior sporting complex. Construction of the sporting faciiity wiil result in the appropriation of a portion of the property that Fine Timber intended to sell. It is envisioned that the construction of the sporting complex wilt start in the middle of 211W, and no estimate of the compensation payable to Fine Timber and others affected will be available until eany Ed'r'i'- ll. DflicedUs Limited is major puoiic company invoived in the stationery and office suppties marl-:et. Before signing the audit report of the company you requested a letter of comfort from the company's oanl-rers that the panic would continue to support Ufficeettls Ltd. nancialty over the next twelve months. The bank agreed that it would continue to provide finance to the company. It was your view that without the financial support of the hanlt, UflicertUs Ltd. would have severe cash flow problems and its nancial report would need to he guatied on a going conoern assumption. On 11] August EDTE the company's bankers wrote to you to advise that in July EU'r'ii the company preached its toan covenant with the panic. As a resuit the panic requested that UflicedUs Ltd. immediately repay the panic loan and it also informed Dfliceiftls Ltd. that it was not prepared to provide it with additional loan funds. You have not yet signed the companys audit report for the year ended EH] June some- REQUtHED: l. EllLl situation ahove, describe the additional audit procedures you would perform prior to issuing your audit report [8 Marks] 2. Describe the audit opinion you intend to issue for each of the above entities for the year ended 30 June EEI-'r'. [It Merits}