You are an honorary auditor of a charity association. In carrying out the audit for the financial year ended 30 June 2015, you discover there were no invoices for an expense item of $18 000. The manager tells you that all disbursements are in order and that he expects the association is going to receive a grant from the government, pending the auditor's report. What should you do?

A. Issue an unqualified auditor's report as it is an honorary job and the manager is reliable.

B. Issue a qualified auditor's report making it clear that you disclaim possible liability should it arise from a discrepancy.

C. Further investigate the expense item, and issue a qualified auditor's report if the item is considered material.

D. Notify the manager that you do not wish the report to be sent to the government for obtaining the grant.