An entity accomplished an early extinguishment of debt and the auditors believe that literal application of GAAP would cause recognition of a loss that would materially distort the financial statements and cause them to be misleading. Given these facts, the auditors would probably choose which reporting option?
A) Explain the situation and issue an adverse opinion.
B) Explain the situation and issue a disclaimer of opinion.
C) Explain the situation and issue an unqualified opinion, relying on Rule 203 of the AICPA Code of Professional Conduct.
D) Issue the standard report.