You are performing an annual audit of a company with a December 31, 20X1 year-end. Your firm is planning to complete the audit on March 1, 20X2 and release the report shortly thereafter. On February 15, 20X2, two material subsequent events occur: There was a significant fire at one of the company's manufacturing plants, and . One of the company's customers files for bankruptcy; your client had an accounts receivable of $500,000 from this customer at 12/31/20x1 (the Company had an allowance for doubtful accounts of $100,000 for this Customer receivable at 12/31/20x1) What impact, if any, will these two subsequent events have on your client's 12/31/20x1 audited financial statements? Attorney Letter There are 3 key parties in each audit re: the Attorney Letter: The Company's Management The Audit Firm . The Law Firm(s) There are 2 lawsuits pending against the Company-one with a vendor and the other with a competitor of the Company. The Owner of the Company said the Law Firm has told him verbally that the suits are without merit and the likelihood of an unfavorable outcome is remote. The Owner would prefer that the Audited Financial Statements not contain any disclosure of these 2 pending lawsuits. You will send the standard Attorney Letter to the Law Firm as soon as the Owner signs the authorization. Question: From a strategic standpoint, what would you advise the Owner of the Company to do to justify either minimizing or omitting reference to the lawsuits from the financial statements