Question
PART IV You and your audit team are really feeling the heat now. The audit is going over the time budget for sure; the
PART IV You and your audit team are really feeling the heat now. The audit is going over the time budget for sure; the draft audit report is going to be late. You begin to worry that this audit issue is material and that LDRF's financial statements would not be fairly represented if $5,000,000 is recognized in the next fiscal year. You decide to write up all the facts, articulate your judgement, and discuss this issue again with the audit partner. After more thoroughly reviewing this matter, the audit partner ultimately agrees with your position and recommends an audit adjustment to the LDRF Executive Director. However, the Executive Director still refuses to recognize $5,000,000 in LDRF's financial statements for the fiscal year ending on June 30, 2022. Case Questions - Part IV 12. At this point, what options does the audit team have? For each option, what are some possible consequences to the client and to the audit firm?
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