In connection with the audit of Flowmeter , Inc., for theyear ended December 31, 20X0, Hirsch, CPA, is aware that certainevents and transactions that took place after December 31, 20X0,but before Hirsch issues his report dated February 8, 20X1, nayaffect the companyâs financial statements..
1. On January 3, 20X1, Flowmeter, Inc., received a shipment of rawmaterials from Canada. The materials had been ordered in October20X0 and shipped FOB shipping point in November 20X0.
2. On January 15, 20X1, the company settled and paid a personalinjury claim of a former employee as the result of an accident thatoccurred in March 20X0. The company had not previously recorded aliability for the claim.
3. On January 25, 20X1, The company agreed to purchase for cash theoutstanding stock of Porter Electrical Company. The acquisition islikely to double the sales volume of Flowmeter, Inc.
4. On February 1, 20X1, a plant owned by Flowmeter, Inc., wasdamaged by a flood, resulting in an uninsured loss ofinventory.
5. On February 5, 20X1, Flowmeter, Inc., issued and sold to thegeneral public $2 million in convertible bonds.
Required
For each of the above events transactions, indicate the auditprocedures that should have brought the item to the attention ofthe auditor and the form of disclosure in the financial statementsincluding the reasons for such disclosure. Organize your answers inthe following format:
Item No. Audit Procedures Required Disclosures and Reasons
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