The financial statements of Chaos Ltd, a listed European company, show the following amounts on year - end 31 Dec 2015 Revenue € 120 mio Profit before taxation € 25 mio Net assets € 460 mio In July 2015 legal proceedings were instigated for serious breach of health and safety legislation amounting to € 10 mio. The directors of Chaos Ltd have not included a provision as the payment is only expected after 31 Dec 2018. Consequence for the audit?

Answer rating: 100% (QA)

The key issue in this scenario is the legal proceedings and the potential liability of 10 million related to the breach of health and safety legislati... View the full answer