Operating versus Nonoperating Expenses You have recently begun a new job as an internal auditor for a large retail clothing chain. The company prepares a multiple-step income statement. You discover that a material amount of salaries expense was erroneously classifed as a nonoperating expense. One of your coworkers argues that the error need not be corrected because the net income number is not affected by the misclassification. You dis- agree. Defend your position.