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3-21 O Diane Harris, a PA, is the auditor of Fine Deal Furniture, Inc. In the course of her audit for the year ended December
3-21 O Diane Harris, a PA, is the auditor of Fine Deal Furniture, Inc. In the course of her audit for the year ended December 31, 2015, she discovered that Fine Deal had serious going-concer problems. Henni Fine, the owner of Fine Deal, asked Diane to delay completing her audit. Diane is also the auditor of Master Fumiture Builders Ltd., whose year-end is January 31. The largest receivable on Master Furniture's list of receivables is Fine Deal Furniture, the amount owing represents about 45 percent of Master Fumihire's total receivables, which, in tum, are 60 percent of Master Fumiture's net assets. The management of Master Fumiture is not aware of Fine Deal's prob lems and is certain the amount will be collected in full. Master Fumiture is in a hurry to get the January 31, 2016, audit finished because the com- pany has made an application for a sizable loan from its bank to expand its operations. The bank 76 PART 1 I THE AUDITING PROFESSION has informally agreed to advance the funds based on draft financial statements submitted by Master Furniture just after the year-end. SEQUIRED What action should Diane take and why
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