Question 4 You are the audit senior responsible for the audit of Figaroo Plc, a UK listed company that manufactures and supplies specialised construction equipment for the rail industry. During the year 2019, there were several complaints from customers concerning the quality of the products Figaroo Plc have been supplying. Some of these complaints have made their way into the newspapers and trade journals, and the trade journalists have suggested that the effect of these matters will be a decrease in the profitability of the company. In one particular instance, a customer is planning to sue the company for unspecified damages as a result of an accident which was attributed to the poor quality of materials supplied by Figaroo. The directors of Figaroo are considering making large provisions for bad and doubtful debt in the year end accounts due to the foregoing problems. However, the directors believe that they do not have to do anything about the possible lawsuit because they are sure the case will collapse at the court Required (a) (b) Identify and describe FIVE audit procedures which can be used in the audit of provisions. (10 Marks) Explain what a contingent liability is, in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets. (2 Marks) Write a memo to the audit engagement partner discussing the audit work to be performed in order to identify any litigation claims and the suggested advice to management in the circumstances. (8 marks) (c) TOTAL 20 MARKS