This scenario is based on the audit of D.B. Singh Inc., a manufacturer of cloth for the clothing industry.

Maria Fortin, a first-year staff member with D.B. Singh's accounting firm Kinney Schultz LLP, has been assigned to the audit of the company's inventory. In the course of her inspection of the inventory of finished cloth, Maria noticed there were a significant number of bolts of black cloth. She also noted that all the other colours had only 25 to 30% as many bolts as the black cloth. Maria was puzzled by what she had seen and decided to ask Harold Masters, the warehouse superintendent, about the different quantities. She commented to Harold, "You must sell a lot of black cloth." Harold responded, "Actually, we sell very little black cloth. When there is a dye problem with any of the other colours, the company dyes the cloth black." Maria then asked Harold how long D.B. Singh had been following the practice he described. He responded that had been the company's practice for as long as he could remember.

Inventory, including raw materials, work-in-process, and finished goods is a substantial asset on D.B. Singh's balance sheet.

Required:

Has Maria demonstrated professional skepticism appropriately? Briefly describe how you think Maria should proceed. Explain your understanding of the implications of what Maria has learned.