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3-You are the auditor of New England Carpets Inc. For the year 2019, you set the overall materiality of $1,000,000, and a tolerable misstatement of
3-You are the auditor of New England Carpets Inc. For the year 2019, you set the overall materiality of $1,000,000, and a tolerable misstatement of $500,000. During the year, the identified the following two misstatements: Accounts Payable: 700,000 Accounts Receivables: 150,000 What should you do? A- Issue an unqualifed opinion since the total misstatement is within the overall materiality limit B. Issue a disclaimer of opinion because the auditor is not sure whether to issue a qualified opinion (due to the individual misstatements) or an unqualified opinion (due to the overall materiality) C. Withdraw from the engagement since the auditor realizes the lack of independence arising from this situation D- Issue a qualified opinion since one of the misstatements is higher than the tolerable misstatement
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