BK443023 AUDIT AND ASSURANCE II QUESTION 4 (25 MARKS: 45 MINUTES) You are an auditor for FoodBest Bhd, for financial year end 31 December 2018. FoodBest Bhd. has been sued by a customer in relation to the company's product. The lawsuit was initiated in August 2018. The company's management and its legal advisor estimated the loss from the suit to be approximately RM200,000. This amount is accrued and properly disclosed in the notes to the financial statement. Your audit team completed the audit and dated your report on 3 March 2019. The audited financial statement was issued on 12 March 2019. However, on 10 March 2019, you have read in a daily newspaper that the judge in the trial awarded the plaintiff of RM500,000. REQUIRED: (a) Explain TWO (2) types of subsequent event. (4 Marks) (b) Explain TWO (2) audit procedures that can be used by you to discover existing loss contingencies. (4 Marks) (c) Discuss the auditor's possible action regarding the news on 10 March 2019. (5 Marks) B. International Standard on Auditing (ISA) 570 Going Concern deals with the auditor's responsibilities in the audit of financial statements to obtain sufficient appropriate audit evidence relating to management's use of the going concern assumption in the preparation of the financial statements. REQUIRED: (b) Describe THREE (3) audit procedures if there is substantial doubt about the client's ability to continue as a going concern as prescribed under ISA 570. (6 Marks) Explain THREE (3) types of audit opinion that can be issued by auditors when there are inadequate and insufficient evident provided by the management to overcome the going concern problems. (6 Marks) END OF QUESTIONS