The fieldwork for the December 31, 2018 audit of Blue Street Incorporated ended on March 16, 2019. The financial statements and auditor's report were issued and mailed to stockholders on March 30, 2019. In each of the situations below, select from the list at the end of the problem the appropriate action to be taken by the auditor. Assume all situations are material.

Situations:

1. On April 4, 2019, you discovered that on February 14, 2019, a hurricane destroyed the entire uninsured inventory in one of Blue Street's warehouses.

2. On February 21, 2019, you discovered that on February 14, 2019, a hurricane destroyed the entire uninsured inventory in one of Blue Street's warehouses.

3. On February 21, 2019, you discovered that on December 1, 2018, a flood destroyed the entire uninsured inventory in one of Blue Street's warehouses.

4. On April 4, 2019, you discovered that on March 31, 2019, a fire destroyed one of Blue Street's 10 plants.

5. On April 10, 2019, you discovered that a debtor of Blue Street went bankrupt on January 6, 2019.

6. On January 12, 2019, a lawsuit was filed against Blue Street for a patent infringement action that allegedly took place in early 2002. In the opinion of Blue Street's attorneys, there is a reasonable (but not probable) danger of a significant loss to Blue Street.

7. On February 10, 2019, Blue Street settled a lawsuit out of court that had originated in 2000 and is currently listed as a contingent liability.

Possible Actions:

a. Adjust the December 31, 2018 financial statements.

b. Disclose the information in a footnote in the December 31, 2018 financial statements.

c. Request the entity revise and reissue the December 31, 2018 financial statements. The revision should involve an adjustment to the December 31, 2018 financial statements.

d. Request the entity revise and reissue the December 31, 2018 financial statements. The revision should involve the addition of a footnote, but no adjustment, to the December 31, 2018 financial statements.

e. No action is required.

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