ColAlta Pipeline An External Auditing Simulation CoLAlta Pipeline, Ltd. Subsequent Events Following are a series of independent situations (i.e. do not let any one situation affect your view of the other situations). For each situation below, descibe what action you believe you as the auditor should take in the given situation, and provide an explanation as to why you believe this is the correct course of action. Support your response with reference to the auditing standards where appropriate. For the purpose of this activity, recall that the nancial statements are dated December 31, 2018. Assume that the audit report will be dated February 15, 2019. Date of the event Event January 8, 2019 A landowner who operates a farm through which the pipeline runs was digging a hole on his property and accidentally damaged part of the pipeline. ColAlta has filed a lawsuit claiming damages in the amount of $80,000. January 5, 2019 When cleaning up her work space one day, one of the Accounts Receivable f Billing clerks discovered an invoice dated December 27, in the amount of $800 to 21 Century Energy, Inc. This invoice had been printed but fell down behind the clerk's desk before being mailed to the customer. February 1, 2019 During the fiscal year, the company loaned $15,000 to Michael Fitzpatrick, the President and Chief Executive Ofcer. Subsequent to the end of the year, you read in the minutes of the Board of Directors meeting that the Board agreed to forgive this loan effective this date. January 6, 2019 While you were interviewing one of the payroll clerks, you were told that there was a rumour of sub-standard materials having been used in one section of the pipeline during construction