Question
Sunnyside External Auditors is currently completing the audit of CVL Enterprises; a firm that sells a variety of plastic products around the continental US.
Sunnyside External Auditors is currently completing the audit of CVL Enterprises; a firm that sells a variety of plastic products around the continental US. During the most recent meeting with the client's senior management, a difference of opinion was noted with respect to an understatement of depreciation expense listed on the income statement which the auditor feels overstates the client's net income. Which of the choices below represent the auditor's best approach to dealing with this difference of opinion? O If the overstatement of net income is not corrected immediately, the auditor should notify management in writing of their intention to withdraw from the engagement. O If the overstatement of net income is immaterial in amount, the additor may proceed and document the threat at an acceptable level. O if the overstatement of net income is material in amount but is confined to the income statement, the auditor should conclude the threat is at an acceptable level. Of the understatement of depreciation expense results in a material change to net income, the auditor should notify the SEC and withdraw from the engagement. MacBo
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started