Subsequent to the date of the financial statements as part of his post balance sheet date auditprocedures a CPA learned that a recent fire caused heavy damage to one of a client's two plants ;the loss will not be reimursed by insurance. The newspapers described the event in detail.. thefinacial statements and footnotes as prepared by the client did not disclose the loss caused by thefire. Which of the following is a condition requiring a departure from a standard unmodified auditopinion

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Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.