1. During the audit of internal control of Partham LLC, a regional distributor of foodstuffs, an audit manager is working on the audit of notes payable and the related interest accounts. The auditor has noted that interest payable accruals related to the loans do not appear to have been entered into the client's general ledger accounts. As a result of this, what action should the auditor take with respect to internal control?

		The auditor should immediately contact management and advise that the audit firm will be issuing a disclaimer of opinion on all accounts related to notes payable and associated interest expense.
		The auditor should not adjust his or her assessed level of control risk, and should refer the discrepancy to the internal audit function for further investigation.
		The auditor should consider this as a control exception, and adjust his or her assessed level of control risk accordingly.
		None of these answer choices are correct.