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A company accomplished an early extinguishment of debt, and the auditors believe that literal application of SFAS No. 98 would cause recognition of a loss that would materially distort the financial statements and cause them to be misleading. Given these facts, the auditor would probably choose which reporting option?

a. Explain the situation and give an adverse opinion.

b. Explain the situation and give a disclaimer of opinion.

c. Explain the situation and give an unqualified opinion, relying on Rule 203 of the AICPA Code of Professional Conduct.

d. Give the standard unqualified audit report.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9417860

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