Question 1

Your client, Hurdles Ltd, operates a rare earth processing plant in Malaysia. Once the processing is completed in Malaysia, the rare earth is shipped to China for use by the medical and automotive producers. Due to the spread of the COVID-19 virus, the Malaysian government introduced the Movement Control Order (MCO) on 11 January 2020. As a consequence, all processing of rare earth stopped in Malaysia. On 27 December 2019, a major contract worth $6 million was agreed with a customer from China with the signing of the contract on 18 March 2020.

Your client's accounting year end was 31 December 2019.

Required

Discuss the auditor's responsibilities for subsequent events of the contract for the year ended 31 December 2019.