Barge Construction Company constructs large oil barges, each requiring from six to nine months to build. The company follows the percentage-of-completion method of recording construction revenue for financial statement purposes. At the audit date, two barges were under construction (one estimated as 96 percent complete and one as 41 percent complete), and there was a backlog of one barge under firm contract (although informal understandings had been reached to construct five other barges, for which materials had been ordered).

All the barges were built under fixed price contracts, including one constructed for the U.S. government during the current year. Warranty costs are recorded as incurred, and have not been significant. The completed-contract method of recording revenue is used for federal income tax purposes; the Internal Revenue Service has never examined the company's federal income tax returns.

The CPA performing the audit of the Barge Construction Company is preparing to discuss subsequent events with management. He has a standard checklist of inquiries, but he is wondering if there are not some specific additional questions he should ask in this case. What specific inquiries would you make on the basis of the preceding information?