Question: Your client, Harper Company, has a contractual commitment as a part of a bond indenture to maintain a current ratio of 2.0. if the ratio
Your client, Harper Company, has a contractual commitment as a part of a bond indenture to maintain a current ratio of 2.0. if the ratio falls below that level on the balance sheet date, the entire bond becomes payable immediately. In the current year, the clients financial statements show that the ratio has dropped from 2.6 to 2.05 over the past year. How should this situation affect your audit plan?
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