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Hull Co has guaranteed the overdraft of an associated company which has recently gone into liquidation. The directors refuse to include any provision in the financial statements in respect of the guarantee but simply disclose the existence of the contingent liability without quantifying it. The auditor requested a specific representation on this matter but the directors are only prepared to acknowledge that a contingent liability exists. In the absence of evidence from other sources, and in view of the materiality of the guarantee, the auditor is likely to express a qualified auditor's opinion on the grounds of which of the following: A. Lack of adequate disclosure of a significant uncertainty resulting from the inability to ascertain the amount of the liability, if any, which exists. B. Inability to obtain sufficient appropriate audit evidence resulting from the lack of accounting and other information available. C. Failure to comply with the requirements of the law to supply information and explanations. D. Material misstatement concerning the failure to recognise the potential liability in respect of the guarantee. |