As part of the audit of DarkSky LLC$,$ the external auditors, PeeDee CPAs are examining the inventory accounts of the client and have

noted potentially material misstatements in multiple inventory accounts. The current asset inventory represents a relatively large

amount of the client$$s total assets, and inventory turnover has been steadily decreasing. Which of the following statements is true

regarding the inventory misstatements?

A$)$ Any potential misstatements whether material or not in the client$$s inventory accounts should be of concern to the auditor

due the heightened audit risk.

B$)$ In order to decrease audit risk, the auditor should obtain written assurances from management to release the auditor of

liability should any future litigation ensure involving this area.

C$)$ As the client$$s inventory represents a relatively large proportion of their total assets, this is likely to be considered material

and would represent an area where an audit adjustment may be required.

D$)$ As inventory turnover is steadily decreasing, it is likely that the client will purchase less inventory moving forward, so

materiality should not be a concern