A) You are an audit senior at Pitt and Associates (PAA), who are the auditors of Discovery Ltd (Discovery), a listed entity that specialises in the manufacture and sale of scientific equipment. PAA is auditing Discovery for the year ended 30 June 2015. Included in Discovery's total liabilities is a three-year bank loan of $5000000 with Resources Bank that is due to be repaid on 31 March 2016. The loan will need to be renewed, as there is a concern that Discovery will not be able to meet its obligations without it. Currently, the loan contains a number of covenants which, if breached, entitle the bank to recall the loan immediately. You have become aware that Discovery has breached its covenants in July 2015. Discovery notified the Resources Bank of the breach. As at the date of signing the financial report, Discovery has not heard from the bank regarding what action, if any, the bank intends to take in relation to the breach. The directors of Discovery have amended the financial report to include full disclosure of the situation.

REQUIRED: Identify the type of auditor's opinion and additional paragraphs, if any, to be included in the auditor's report that PAA can issue in this situation. Explain your response.