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Question 3: Your tirm is the external auditor to two compernics One is a hotel....

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Question 3: Your tirm is the external auditor to two compernics One is a hotel. Tahifa, the other it a food wholesuler. Parvez, which supplies the hotel. Both compunies have the same year-end. Juat before tho year end. a large number of guests became ill at a wedding reception at the hotel, presibly as a restuft of food poisoning: The guests have taken legal action agninst the hotef and the hotet has iaken actioa ogatist tha foogl. Wholesaler. Neither the hotel nor the food whicester has adinilicd liahility. The betel is negotiating oit of-ecrurt settements with the ill guests, the focd wholestier is negotiating an vetof-court sutilement with the hotel. At the year end, the public health authonties have not completal their mvestigations. weil" but refuse to corfirmi ghis in writing. The amounts insohed are thaterial io the fluancial tatcineits of both companies. Required: Assuming that your firm continues with the audit of both companjes for ech company, deseribe the difficulties you loresee in obtaining sulficient audit esidenec firf putential grovisions, contingent liabilities and contingent assets

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