QUESTION 5 - SUBSEQUENT EVENTS (6 MARKS) The nancial year of your audit client Bartex Ltd, a company that both manufactures and imports toys for resale, ended on 31 December 2019. Your audit report was signed on 22 February 2020 and the nancial statements were issued on 7 March 2020. Each of the following independent events, which the auditors have discovered after the end of the nancial year, have a material effect on the nancial statements: a) 16 February 2020 Bartex Ltd disposed of equipment that had not been used in operations since June 2019 for $255,000. The book value of the equipment on balance date and included in the nancial statements was $1,100,000. b) 28 February 2020 The Australian government declares the imported 'gel blaster' toy guns as unsafe, and subsequently has placed a ban on the sale of these items with immediate effect. Battex Ltd has $400,000 worth of these items in inventory. Reguired: For each of the two events above, explain the auditor's responsibilities and the auditor's appropriate course of action. (2 x 3 marks)