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You are the auditors of Buildmax Inc. for the year ended 31 December 2020. Fieldwork...

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Accounting

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You are the auditors of Buildmax Inc. for the year ended 31 December 2020. Fieldwork was completed on 15 January 2021, the audit report is dated 28 February 2021, and the financial report is to be issued on 15 March 2021. On 21 November 2020, Buildmax bought a new building in Fiji, which is recorded at cost in the accounts. On 10 March 2021 you discovered that the building had been destroyed by fire on 18 December 2020. The building was uninsured and the amount was material. Assuming there are no other matters of note for the Buildmax engagement, in relation to the financial report, the required action by management is (select the appropriate number): 1 - No action is required 2 - Adjust the financial statements 3 - Disclose in the financial statements 4 - Disclose in the Director's Report a. 1 O b. 2 O O c. 3 d d. 4

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