Your client, Huge Telephone Company (HTC), has been hitting troubled times, due to deregulation. There is competition for local telephone business, long distance telephone business, and the high speed lines provided via the telephone network have not been selling as well as expected. A new quirk is that many large cities are going to provide free wireless services by installing wireless transmitters on telephone poles and is only offering to pay a pittance for the use of the telephone poles. HTC has been able to achieve reasonable profits by cutting staff to a bare minimum and outsourcing many services. However, due to several labour contracts and federal legislation that will increase services, you have doubts about the ability of the company to renew a major bond issue this coming year. Required: How does the above information affect the audit report?