You are finalizing the audit of LMNOP Ltd and you have come across the following material events. State what evidence would have brought the following to your attention, how you would assess the importance of these issues, and how these items should be disclosed in the financial statements:

Explain all the below questions:

1) Pending class action lawsuit against the company.

2) There was a fire in the warehouse, after the audit field work was completed but before the audit report is issued. The inventory was insured.

3) Debt covenants on existing loans to the bank.

Answer rating: 100% (QA)

Matter Evidence brought to notice Assessment of significance Disclosure in financial statement 1 Cla... View the full answer