Turnbull Ltd has placed deposits with an overseas supplier totalling $340 000 for the manufacture of specially branded goods on 14 May 2016. On 27 May 2016 the supplier closed due to civil unrest in the country. Expert opinion obtained on 28 July 2016 stated that it was unlikely that the deposit would be recovered. Turnbull Ltd purchases over $3 million worth of branded products from this supplier every year. The year-end for the Turnbull Ltd audit is 30 June 2016, and the audit report is due to be signed on 14 August 2016.

Required

(a) Is the event material?

(b) What is the appropriate treatment of this item in the financial report?

(c) What audit report would be appropriate if the directors of Turnbull Ltd refuse to change the financial report?