You are the supervisor on the audit of New Generation Club, a large suburban club in New South Wales. As well as the usual club facilities such as poker machines, bars and a bistro, the club also operates a large gymnasium, an indoor heated pool and a restaurant. The following dates are relevant to the current audit engagement:

End of the reporting period 30 June 2020

Financial statements signed 15 August 2020

Auditors report signed 15 August 2020

Annual report mailed to members 22 August 2020

You are aware that the following independent and material events have occurred.

1. On 23 August 2020, the general manager informed you that on 18 August 2020 the board decided to sell land it was holding as a long-term investment. It seems that a very generous offer was made by an overseas buyer. The contract is due to be signed on 25 August 2020.

2. On 10 August 2020, the board signed a contract for the upgrade of the clubs air conditioning system. The upgrade is necessary to ensure compliance with new workers compensation regulations. The first payment of $100 000 is due on 1 September 2020. Work will be completed (and the final contract payment made) by 30 June 2021.

Required:

For each event:

a. What are auditors responsibilities toward the subsequent event?

b. What are the audit evidences/procedures need to be obtained/performed to examine the effect on the financial statements for the year 30 June 2020?