1. Subsequent to the date of the financial statements as part of her postbalance sheet date audit procedures, a CPA learned of heavy damage to one of...

1. Subsequent to the date of the financial statements as part of her postbalance sheet date audit procedures, a CPA learned of heavy damage to one of the client's two plants due to a recent fire; the loss will not be reimbursed by insurance. The newspapers described the event in detail. The financial statements and notes as prepared by the client did not disclose the loss caused by the fire.