The financial year of your audit client Boss Ltd ended on 30 June 2021.Your audit report is expected to be signed on 20 August 2021 and the financial statements are due to be issued on 3 September 2021. The auditors have discovered the following material event:

On 19 July 2021 Boss Ltd settled a legal action out of court that had originated in 2019 and that is listed as a contingentliability.

Required:

1. Identify and explain the auditor's responsibilities in relation to this event.
2. What is the appropriate course of action for the client?
3. Assume that management do not agree with any recommendations that you make as the auditor.What type of audit opinion would youprovide?