The financial year of your audit client JDL Ltd ended on 30 June 2020. Your audit report was signed on 21 August 2020 and the financial statements were issued on 4 September 2020.The auditors have discovered the following material event:

A customer of JDL Ltd reported losses in recent years. On 13 August 2020 the customer, who owed JDL Ltd $84 000, declared bankruptcy.

Required:

Explain the auditors responsibilities and the appropriate course of action for the auditor. Where appropriate, include any specific amendments to the financial statements. (4 marks)