The financial statements of Chaos Ltd, a listed European company, show the following amounts on year - end 31 Dec 2015 Revenue 120 mio Profit before taxation 25 mio Net assets 460 mio In July 2015 legal proceedings were instigated for serious breach of health and safety legislation amounting to 10 mio. The directors of Chaos Ltd have not included a provision as the payment is only expected after 31 Dec 2018. Consequence for the audit