You are the auditor of Sungai ACE Berhad, a public listed company in Malaysia. The following dates are relevant to the current audit engagement:

End of the reporting period 30 June 2019

Financial statement signed 15 August 2019

Auditors report signed 15 August 2019

Annual report mailed to members 22 August 2019

You noted the following independent and material items during your subsequent events review.

(a) On 16 July 2019, there was a fire in the companys main warehouse. Loss of inventory was covered by insurance, but there was significant disruption to the flow of production output. The financial effects of the disruption are estimated to be RM1,500,000 and are not covered by insurance.

Require the management to disclose to the notes to the account.

Audit procedure: Examine the polices report and insurance report on the nature of the event which the fire particular attention to the date and when the fire actually took place. Besides, we also examine what is the principle of the basic arrive the disruption of the business.

(b) The company manufactures textiles and purchases raw cotton from overseas. A shipment of cotton was in transit at the end of the reporting period and, given that price per bale is determined by quality, an estimated cost of RM125,000 was recognised. The cotton duly arrived on 28 July 2019, and after examination, it was determined that the cost will be RM163,000.

(c) On 21 August 2019, the purchasing manager discovered that a batch of invoices related to June 2019 inventory purchases had not been processed. The invoices totaled RM570,650.

(d) On 31 August 2019, the Department of Occupation Health and Safety charged the company over unsafe storage practices that resulted in the leakage of toxic materials into a local creek. The leakage occurred on 25 August 2019. If found to be negligent by the court, the company will have to pay a fine of RM550,000 plus legal and clean-up cost in excess of RM300,000.

(e) Due to the recent outbreak of Covid-19, the management has decided to close down the foreign operation in Thailand. The decision was made on 1 July 2019 and redundancy notice has been sent to the staff on 15 July 2019. The closure costs are estimated to be RM7,000,000

Required

(i) What additional information would you obtain in relation to each of the event described above? You are required to provide at least ONE (1) audit procedure.

(10 marks