Smith & Associates are the auditors of Fleur Corp. For the year 2020, Smith set the overall materiality of $1,500,000, and a tolerable misstatement of $750,000. During the year, the identified the following misstatements:

Inventory: 500,000

Accounts Receivables: 600,000

Accounts Payable: 650,000

What should the auditor do?

A) Issue a qualified opinion since the total misstatement is higher than the overall materiality

B) Issue an unqualified opinion since the individual misstatements are all within the tolerable misstatement limits

C) Issue a disclaimer of opinion because the auditor is not sure whether to issue a qualified opinion (due to the overall materiality) or an unqualified opinion (due to the individual misstatements)

D)Withdraw from the engagement since the auditor realizes the lack of independence arising from this situation