The following events occurred in different cases, but in each instance the event happened after the close of the fiscal year under audit, but before all representatives of the auditor had left the office of the client. State in each case what notice, if any, you would take in your report on the fiscal year; the closing date in each instance is December 31, 19X8.

1. Merchandise handled by the company had been traded in the open markets in which it procures its supplies at \($1.40\) on December 31, 19X8. This price had prevailed for 2 weeks, following an official market report that predicted vastly enlarged supplies; however, no purchases were made at \($1.40.\) The price throughout the preceding year had been about \($2,\) which is the level experienced over several years. On January 18, 19X9, the price returned to \($2,\) following public disclosure of an error in the official calculations of the prior December, correction of which destroyed the expectations of excessive supplies. Inventory at December 31, 19X8, was on a cost-or-market basis.

2. On February 1, 19X9, the board of directors adopted a resolution accepting the offer of an investment banker to guarantee the marketing of \($100\) million of preferred stock.

3. On January 22, 19X9, one of the three major plants of the client burned, with a loss of \($50\) million which was covered to the extent of \($40\) million insurance.

4. The client in this case is an investment company of the open-end type. During the early part of 19X9 a wholly new management came into control. By February 20, 19X9, the new management had sold 90 percent of the investments carried at December 31, 19X8 and had purchased others of a substantially more speculative character.

5. This company has a wholly owned but not consolidated subsidiary producing oil in a foreign country. A serious rebellion began in that country on January 18 and continued beyond the completion of your audit work. The press in this country has carried extensive coverage of the progress of the fighting.