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You are one of five auditors at Watson LLP, a public accounting firm whose long-time client, YHG Ltd., decided that it could no longer afford
You are one of five auditors at Watson LLP, a public accounting firm whose long-time client, YHG Ltd., decided that it could no longer afford your audit fees. Instead, YHG decided to find a new auditor to satisfy the company's loan requirement of annual audited financial statements. A year and a half later, you run into YHG's banker. He mentions that he really appreciates your reducing your fee so that YHG could continue using your services, as the bank really values Watson LLP's reputation in the community. You are unsure what to say in the moment and return to your desk. What action, if any, must you take next? Question 4 options: a) Direct YHG to contact anyone to whom it has either directly said or indirectly implied that Watson LLP is still YHG's auditor, and correct the misinformation. b) Resign from Watson LLP, as it was your former audit client, YHG, who has falsely associated Watson LLP with its financial statements. c) Contact the listing issuer and report YHG for its false and misleading information. d) No action is required, as you are no longer providing audit engagements to YHG
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