Question
Scenario: Intelligis Electronics is a manufacturer of advanced electrical components. During the year, changes in the market resulted in a significant decrease in the demand
Scenario: Intelligis Electronics is a manufacturer of advanced electrical components. During the year, changes in the market resulted in a significant decrease in the demand for their products, which are now being sold significantly below cost. Management refuses to write off the products or to increase the reserve for obsolescence.
a. State the condition (either change in accounting principle, failure to follow GAAP, none, reporting involving other auditors, or scope of the audit has been restricted)
b. State the materiality level (either Material, immaterial, highly material, material or highly material, or not applicable)
c. List any additional information needed (either amount of loss, auditor's preliminary judgement, client explanation in a memo, or the size of the misstatement
Please use the scenario above to answer part a, b, and c. Thank you.
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