Upon completion of the audit of Burrow Enterprises, the audit firm has recently completed its...
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Upon completion of the audit of Burrow Enterprises, the audit firm has recently completed its audit report which has been released, along with the financial statements, to the public. In the last few days, the auditors have learned that due to a new competing product coming out in the marketplace, the value of the client's inventory may be significantly less. As a result of this finding, what might the auditors need to do? The auditors should simply add an emphasis-of-matter paragraph to the audit report. This should be done in lieu of any further audit procedures related to inventory. The auditors should consider issuing a disclaimer of opinion on the client's inventory and cost of goods sold accounts. All other accounts and financial statements will continue to be covered by the unmodified opinion. The auditors have no responsibility in relation to this new information, as this information was not available during the audit. It can be safely ignored. The auditors may need to consider extending further audit
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