Subsequent Facts and Events. In connection with their audit of the financial statements of Swan Mfg. Corporation of Ayutthay, Thailand for the year ended 31 December 20X4, Virameteekul, Kanchana & Banharn, Chartered Accountants (CA) review of subsequent events disclosed the following items:

1 3 January 20X5: The government approved a plan for the construction of an express highway. The plan will result in the expropriation of a portion of the land owned by Swan Mfg. Corporation. Construction will begin in late 20X5. No estimate of the condemnation award is available.

2 4 January 20X5: The funds for Baht 1,000,000 loan to the corporation made by the company president, Somsak Na Lan, on 15 July 20X4, were obtained by him from a loan on his personal life insurance policy. The loan was recorded in the account ‘loan from officers’.

Mr Somsak’s source of the funds was not disclosed in the company records. The corporation pays the premiums on the life insurance policy, and Mrs Somsak, wife of the president, is the beneficiary.

3 7 January 20X5: The mineral content of a shipment of ore en route on 31 December 20X4, was determined to be 72 per cent. The shipment was recorded at year-end at an estimated content of 50 per cent by a debit to raw material inventory and a credit to accounts payable in the amount of Baht 824,000. The final liability to the vendor is based on the actual mineral content of the shipment.

4 31 January 20X5: As a result of reduced sales, production was curtailed in mid-January and some workers were laid off. On 5 February 20X5, all the remaining workers went on strike. To date the strike is unsettled.

Required

Assume that the items described above came to your attention prior to completion of your audit work on 15 February 20X5. For each item:

A. Give the audit procedures, if any, that would have brought the item to your attention.

Indicate other sources of information that may have revealed the item.

B. Discuss the disclosure that you would recommend for the item, listing all details that you would suggest should be disclosed.

Indicate those items or details, if any, that should not be disclosed. Give your reasons for recommending or not recommending disclosure of the items or details.