(a) What are the key audit matters? How do these affect the format of the audit report?

(a) What are the key audit matters? How do these affect the format of the audit report? 
b) Stewart Jones is reviewing the results of the subsequent events audit procedures. Stewart is
writing a report for his audit partner based on these results and will be attending a meeting
tomorrow with the partner and representatives of the company to discuss them. The issue will be
whether the financial report should be amended, or additional notes included for these
subsequent events.
Many of the items are not material and Stewart will recommend that no action be taken with
respect to these. However, there are several items that Stewart believes are material and should
be discussed at the meeting. These are as follows.
(a) The board is planning to issue shares in a private placement on 15 August. 
(b) The share issue is to fund the purchase of a 60 percent stake in another company. The
negotiations are in the final stages and although the contract is not yet signed it will be signed
by 15 August. 
(c) A writ was lodged in the Supreme Court in the week after year-end claiming damages for
illness allegedly caused by chemicals used at a subsidiary company’s manufacturing plant in
the 1990s. This is the tenth such writ lodged, and the client has denied responsibility in all
cases because it was unreasonable to believe at that time that these chemicals had adverse
health effects. The claimant has new scientific evidence that counters this defense.
(d) The review of subsequent cash receipts has revealed that several of the trade receivables that
were considered doubtful have now been paid. However, the audit procedures have shown
that a large debtor that was considered safe at 30 June was unexpectedly declared bankrupt
on 20 July. 
The year-end for the company is 30 June and the audit report is due to be signed on 20 August.
Required:
For each of the items above, explain what type of subsequent event it is and the appropriate
treatment of the item in the financial report.