From: "Darlene Wardlaw" Subject: Subsequent Events Well this audit turned out to be a little more interesting than we initially expected, didn't it? Hope you didn't run into too much trouble when you crossed the picket lines. I've attached the last set of minutes from Apollo's Board of Directors. You need to prepare a memo (to be placed in the A series with the financial statements) on these subsequent events and how you believe we should address them. Include the following in your memo: 1. An explanation of the reasons subsequent events must be disclosed in the financial statements even though they occurred after the balance sheet date. Include in your explanation the difference between the disclosure of Type I and Type II subsequent events. 2. Give the audit procedures that, in addition to verbal inquiry and the client's representation letter, should be performed as part of the subsequent event audit work. 3. Discuss the accounting and/or disclosure, if any, you would recommend for the subsequent events discussed in the minutes, stating all details that should be disclosed. I've also attached the letter that we received from Apollo's attorney. DW