i) Financial Statement Amendment:

• The financial statements should be amended as the event provides evidence of a condition that existed at the reporting date (30 September 2019). The contingent liability should be adjusted from GH¢2 million to a provision of GH¢1 million, as it is probable that Aseye Ltd will agree to this settlement. This is in accordance with IAS 37: Provisions, Contingent Liabilities and Contingent Assets.

Audit Procedures:

• Review correspondence with the supplier to confirm the settlement amount of GH¢1 million.
• Discuss with management to verify their intention to settle the lawsuit for GH¢1 million.
• Obtain a written representation from management confirming the likelihood of settling for GH¢1 million.
• Contact the company’s legal advisors to assess the probability and amount of the settlement.

ii) Auditor’s Responsibility:

• Between year-end date and the date the auditor’s report is signed:
  The auditor has an active responsibility to perform procedures to identify subsequent events that require adjustment or disclosure. This includes reviewing management procedures, inquiring of management, and considering if further adjustments are necessary based on subsequent events, as outlined by ISA 560: Subsequent Events.
• Between the date the auditor’s report is signed and the date the financial statements are issued:
  After the report is signed, the auditor is not required to perform any audit procedures unless they become aware of facts that may materially affect the financial statements. If such events occur, the auditor should discuss them with management and determine whether the financial statements need to be amended. If amendments are made, the auditor may need to extend their review to cover the period up to the new report date.