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Joe Smith used generally accepted auditing standards to issue an unqualified opinion on QCo's financial statements. A month later, a main City newspaper stated that

Joe Smith used generally accepted auditing standards to issue an unqualified opinion on QCo's financial statements. A month later, a main City newspaper stated that QCo's CEO, Mary Jones, stole small amounts of inventory--which is immaterial compared to QCo's overall inventory. CFO Frank then asks Joe to refund the audit fees, sating that Joe improperly performed the audit, e.g., not detecting this fraud which made QCo's financial statements not fairly stated due to Joe's actions. How should Joe respond to this claim?

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