Accounting · Audit Procedures for Subsequent Events

Which of the following audit procedures should be carried out on Event 2 (a non-adjusting event involving a pending fine for environmental legislation breaches after the reporting period)? 1. Inquire of the directors whether they will recognise a provision for a fine in the financial statements. 2. Obtain board minutes to determine the extent of the damage. 3. Inspect environmental legislation and any interim reports from the Environmental Agency to determine the potential fine and damage.