One of your clients, De Anza Corporation, has a contractual commitment as a part of...
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Accounting
One of your clients, De Anza Corporation, has a contractual commitment as a part of bond indenture to maintain the current ratio of 2.0. If the ratio falls below that level on the balance sheet date, the entire bonds become payable immediately. In the current year, the client's financial statement shows that the ratio has dropped from 2.6 to 2.05 over the past year. Please discuss how should this situation affect your audit plan? Please state your plan with specific audit approach/strategy/procedures.
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