Joseph Josephs, CPA is auditing the Elder Company's current year's annual financial statements and notices that the Company has violated the 2.1 to 1.0 current ratio requirements as part of its debt agreement with the Sunshine Bank. The company's current ration is 1.85 to 1. Elder's management believes (strongly) that it will improve their current ratio during the 90-day grace period. Nonetheless, the bank has the "right" to call in the entire $2 million loan. However, Joseph is not sure and must issue his report before this grace period expires.