Should joseph qualify opinion or demand in light

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Joseph Josephs, CPA is auditing the Elder Company's current year's annual financial statements and notices that the Company has violated the 2.1 to 1.0 current ratio requirements as part of its debt agreement with the Sunshine Bank. The company's current ratio is 1.85 to 1. Elder's management believes (strongly) that it will improve their current ratio during the 90-day grace period. Nonetheless, the bank has the "right" to call in the entire $2 million loan. However, Joseph is not so sure and must issue his report before this grace period expires. Should Joseph qualify his opinion or demand that Elder re-classify this loan as a short-term liability, in light of the above circumstances?

Reference no: EM13215771

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