Subsequent Events You are the auditor of South Face, a public company. South Face ("the Company") manufactures and distributes ski and snowboard equipment worldwide through a network of independent distributors. You are conducting the audit for the year ended December 31,2018. The following unrelated events occur and/or come to your attention after the balance sheet date but before the date of your opinion on the financial statements (March 10,2019): There was a fire at the Company's main manufacturing plant, located in Park City, Utah, on February 14,2019. Even after insurance reimbursements, the Company expects to have material losses as a result of the fire. (Note: you do not need to discuss the adequacy of their insurance policy) 1. For each of the item, state the appropriate action for the situation: 1. Adjust the December 31, 2018 financial statements 2. Disclose the information in a footnote to the December 31,2018 financial statements but do not adjust the 2018 financial statements 3. No action is required