January 7, 2020, it is discovered that Hollis Mfg. Corporation has materially underestimated the total cost to complete a long-term construction project on which revenue is recognized by the percentage-of-completion method. The amount of income (loss) to be recognized on the project should be recomputed using revised cost estimates. Which of the following is correct?

a. None of the answers are correct

b. This should be disclosed in the audit report.

c. Adding a note to the financial statement should be sufficient.

d. Adjusting entry should be made to 2019 financial statement.