Materiality exercise and Homework #3 The Reinke Bread Company (RBC) is a major retailer of specialty sandwich items and baked goods The following information represents the company's financial position as of December 31, 2018, and December 31, 2017 (unaudited) December 31, 2018 (audited) December 31. 2017 Total assets Accounts receivable $698,752.000 25,152.000 $542,609.000 19,041,000 Total sales Cost of goods sold Net income Eamings per share 1,066.691,000 842 255,000 57.456,000 $1.81 828.971,000 628,534.000 58,849,000 S1.88 RBC's auditor assesses RBC as a high audit nsk. The auditor has detected an overstatement of accounts receivable of $345,000 The misstatement is not a surprise to the auditors, as they have detected misstatements in this account in the past On a per share basis, the misstatement represents S0.01 of canings per share. The auditor believes that the misstatement should be corrected Management argues strongly that they prefer not to make the correction because they do not believe it is material, that is. the misstatement represent just over 1% of the account balance. Although left unsaid, the auditor knows that management is under considerable pressure from Wall Street to meet analyst expectations for earnings per share. Reducing earnings per share by even $0 01 would cause the trend in earnings to become even more negative than the unaudited financial numbers already reveal, and it would cause the company to just miss analyst forecasts for earnings per share b. What difficulties does the auditor face when the alternative benchmarks yield differing conclusions about materiality