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An auditor is finishing his audit at Audit Client, which is a large publicly traded company. Auditor receives a text message from Review Client.
An auditor is finishing his audit at Audit Client, which is a large publicly traded company. Auditor receives a text message from Review Client. Review is seriously considering filing bankruptcy. This is a surprise to the auditor. Review Client is a major customer of Audit Client. As a result, Auditor believes that Audit Client's Allowance for Doubtful Accounts and Bad Debt Expense are understated and net income is materially overstated. Answer each of the following and briefly explain your answer. 1. Should the auditor tell Audit Client that Review Client is near bankruptcy! 2. Should the auditor issue an unqualified opinion to audit client without adjusting for the expected bankruptcy of review client? 3. What should the auditor do to resolve the situation? 20 2 000 000 14 MacBook Air 11 4 4 $ 4 54 25 % A & 6 27 7 8 9 E R T Y U O D F G H J K L C > B N M V
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