The financial year of your audit client Alice Ltd ended on 31 December 2020. Your audit report was signed on 19 February 2021 and the financial statements were due to be issues on 10 March 2021. The auditors have discovered the following on 18 January 2021 Alice Ltd settled a legal action out of court that had originated in 2018 and that is listed as a contingent liability.

Required;

a) Identify and Explain the auditor's responsibilities in relation to this event.

b) What is the appropriate course of action for the client?

C) Assume that management do not agree with any recommendations that you make as the auditor. What type of audit opinion would you provide?