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You complete procedures over the Inventory and find exceptions totaling $40K. The established materiality threshold...

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Accounting

You complete procedures over the Inventory and find exceptions totaling $40K. The established materiality threshold is $30K. Answer the following

  1. As is (without making an adjustments), is the balance fairly stated? If no, what needs to be done for the account to be fairly stated?
  2. You discuss the adjustments above with management and they decide they do not want to make the adjustments. As the $40K is over materiality (i.e. a material difference), does this impact the audit opinion over the financial statements and if yes, how?

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