An Entity Has Violated a Minor Requirement of Its Bond

Multiple Choice

An entity has violated a minor requirement of its bond indenture that could result in the trustee requiring immediate payment of the principal amount due. The entity refuses to seek a waiver from the bond trustee. Request for immediate payment is not considered likely. Under these circumstances, the auditor must:

A) require classification of bonds payable as a current liability.
B) contact the bond trustee directly.
C) evaluate whether there is substantial doubt about the entity's ability to continue as a going concern.
D) obtain an opinion from the company's attorney as to the likelihood of the trustee's enforcement of the requirement.