#19

is part of the audit of Bloomtree Corporation, the audit firm, Neall CPAs have determined that the client's receivables turnover ratios re drastically lower than industry averages, and have continued to decrease over the past three years. The auditors predict that if this rend continues, the client's liquidity position will soon fall in breach of debt covenants associated with significant outstanding loans. Which of the following represents the auditor's most appropriate response to this? The auditors should attempt to convene a meeting with the client's senior management. In this meeting, the auditors should recommend refinancing of any currently maturing long-term debt to help improve the client's liquidity position. The auditors should consider discussing the client's ability to continue as a going concern with the client's senior management. If concern over this assumption remains after the meeting, the auditors should consider recommending management insert appropriate disclosures in the financial statements. The auditors should consider requesting the client immediately outsource the receivables function to a third party. If the client can find a firm that specializes in collection, it will be able to improve its liquidity position. None of these answer choices are correct