Substantive procedures and audit evidence

You are about to complete the planning stage of the audit of Seymour Print Ltd and you are considering your approach to several events that have occurred during the year.

Seymour Print Lars revenue for the year is S25 million and profits are $3 million.

a) A customer has made a claim against Seymour Print Ltd for breach of contract. They claim that products were not delivered in accordance with the contract, and this led to them having to engage other contractors to carry out the work at great expense. The customer is suing Seymour Print Ltd for damages of $1 million. (7 marks)