Your firm is the external auditor of Mongo Ltd (Mongo), a listed entity. Consider each of the following independent and material situations (i-iv), each of which has occurred in relation to Mongo. In each case:

• the balance date is 30 June 2021;

• the field work was completed on 12 August 2021;

• the Directors Declaration and the Audit report were signed on 19 August 2021;

• the completed financial report accompanied by the signed Audit report was mailed to

(i)

(ii)

(iii)

(iv) Required:

On 29 September 2021, you discovered that a debtor at 30 June 2021 had gone bankrupt on 1 September 2021. The debt had appeared collectible at 30 June 2021 and 19 August 2021.

On 12 August 2021, you discovered that a debtor had gone bankrupt on 1 August 2021. The sale took place on 15 July 2021. The cause of the bankruptcy was a major uninsured fire at one of the debtors premises on 1 July 2021.

On 13 August 2021, you discovered that a debtor at 30 June 2021 had gone bankrupt on 5 August 2021. The cause of the bankruptcy was an unexpected loss of a major lawsuit issued against the debtor on 10 June 2021.

On 30 September 2021, Mongo settled a lawsuit for about twice the amount accrued in the financial report as a contingent liability.

the shareholders on 25 August 2021.

For each of the events described above (i-iv), select the appropriate action from the list below (A-D), and justify your response.

1. Adjust the 30 June 2021 financial report.

2. Disclose the information in the notes to the 30 June 2021 financial report.

3. Request that the client recall the 30 June 2021 financial report for revision.

4. No action is required.