As an auditor, how would you handle these events? What is the proper treatment?
-On July 10, 2015, while you are doing the audit fieldwork, the company suffers an uninsured loss estimated to be $2,000,000 due to a fire at its main facility.
-One of your JMP'S major customers filed for Chapter 11 bankruptcy protection on July 28, 2015. The company cited "general economic conditions" as the reason. The customer owed JMP $52,000 on June 30,2015. The company controller was not aware of any financial difficulties at this supplier prior to the bankruptcy announcement.
-On July 20, 2015, JMP announced a merger with QRS Corporation, effective July 1, 2015. The combined companies will be required to prepare consolidated financial statements in accordance with GAAP.