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You have recently begun a new job as an internal auditor for a large retail clothing chain. The company prepares a multiple-step income statement. You

You have recently begun a new job as an internal auditor for a large retail clothing chain. The company prepares a multiple-step income statement. You discover that a significant amount of salaries expense was erroneously classified as a non-operating expense. One of your coworkers argues that the error need not be corrected because the net income is not affected by the misclassification. You disagree. Defend your position, explaining how the misclassification will make a difference to the users of the income statement.

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