Should the liabilities be reported? Dudley Dorite, CPA, the lead external auditor of Needles Company thinks that Needles may be understating the liabilities on its balance sheet. Needles’s...

Should the liabilities be reported? Dudley Dorite, CPA, the lead external auditor of Needles Company thinks that Needles may be understating the liabilities on its balance sheet. Needles’s transactions are very complex, and outsiders may never figure this out. Dorite asks his CPA firm’s audit standards committee how he should handle the situation. The CPA firm’s committee replies, “Require Needles to report all its liabilities.” Needles is Dorite’s most important client, and Needles is pressuring him to certify the liabilities. Dorite can rationalize that Needles’s amounts are okay. What should Dorite do? What would you do?