You have been hired to be an external auditor for Joe Corp. Joe Corp has two locations (A and K). The A location accounts for the majority of the business (100% income, 90% assets, 80% inventory). You have been hired and have agreed to do the audit at a price estimate of $3500. Currently you have audited the A location and are running a cost of $2800, which is $700 over budget. The reason you are over budget is that (a) your staff did some things incorrectly (which you fixed) (b) You found some errors in inventory methods. When you originally proposed this audit you anticipated that you would not have to go to K location, since all it had was inventory, and you stated as such to the CEO of Joe corp (shockingly Joe). Now, however in addition to the errors in inventory, which the company refuses to fix, you tell them that you (a) need to visit K location since it has inventory which was previously wrong and (b) your price is going up b/c of the extra work and travel.

The CEO adamantly refuses. He says "I will not pay for you to go get a sun tan and adult beverages". I refuse to let you into that facility. He further argues "You told me you would not have to go there, that is why I hired you, you cant change your mind now".

State what type of audit report you would/ could issue and give your reasoning and the counter reasoning. Furthermore, state what part of the fees the CEO could argue, and how you would calculate them.