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You are the auditor of WWW. On 3 January 2021, you were told that one of WWW's competitors has started a lawsuit against WWW. The
You are the auditor of WWW. On 3 January 2021, you were told that one of WWW's competitors has started a lawsuit against WWW. The competitor alleged that WWW has engaged in misleading advertising. On 3 February 2021, WWW successfully negotiated a settlement with the competitor whereby WWW would cancel the said advertisement and pay $2 million in compensation in return for the competitor to drop the lawsuit.
Additional information:
- Annual balance date: 31 December 2020
- Completion of audit fieldwork: 2 February 2021
- Signing of audit report: 8 February 2021
- Publication of financial statements: 24 March 2021
Required:
State what the auditor will either do or request Management to do. Justify your response. (2 Marks)
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