Subsequent Events:

The following material events have come to the engagement partner's attention before the audit report scheduled on 31 August 2020 is issued.

1.On 5 July 2020, the the Australian Securities and Investment Commission (ASIC) concluded its investigation on the financial technology sector. The ASIC charged MIA and two other firms for publishing misleading advertising on their investment performance. According to the ASIC, ABC and the other two firms used aggressive social media advertising techniques to reach out to a large client base between May 2018 and July 2019. ABC, ASIC noted, included 2% of its client accounts which had higher than average investment returns, and compared this with rates of investment return to competitors' actual trading returns. The charges against ABC were $2.5 million, and materially affect the company's financial report. ABC accepted the charge without any appeal.

2.On 6 July, following the news of the ASIC charge, the share price of ABC declined by 30%.

3.On 18 July 2020, ABC Investments reached a settlement with a former employee and paid $250,000 claim resulting from early staff termination that occurred in May 2019. The company has not previously recorded a liability for the claim.

4.On 20 August 2020, ABC Investments issued shares worth $3.8 million. The issuance of the shares significantly increases outstanding shares of ABC.

ABC Financial year ended in June 2020.

Does above transactions effects when considering and issuing audit report ? and what type of audit report will issue if management does not want to include those transactions ?

Do we need to take in to account before finalizing the financial statement of ABC ?