Understanding the AICPA Audit Standards CASE 1 You have just completed your audit of your non-issuer's financial statements. You learned that the company does not record their inventory at the lower of cost or market (LCM). There is a material difference between the recorded amount and the LCM amount. They will not make any adjustments. Will this affect your opinion? If so, how would you modify your opinion? Where can you find this information in the Clarified Audit Standards? CASE 2 You are auditing a brand new client. You would like to send out an accounts receivable confirmation to a major customer to confirm the accounts receivable that the customer owes your client. The client will not allow you to send out a confirmation. They say it will upset their customer. Alternate procedures do not work since the customer has not paid their receivable and the supporting documents for the sale are not sufficient evidence. Will this affect your opinion? If so, how would you modify your opinion? Where can you find this information in the Clarified Audit Standards