your firm has been engaged too audit the financial statement of art and company (A&C) for the year ended December 31,2020. On jun 1 , 2020 A&C Started a product warranty program to remain competitive with other companies in the industry. the warranty covers parts, lobour and shipping to repair any defects within one year of purchase.

during 2020,A&C paid 50000 of warranty costs on product sales of 4000000 ( approximately 80000 units). using this data, management estimates warranty liability at December 31 is 80000

A.assess the risk of the material misstatement at the assertion level for the warranty liability account include an explanation to support the factors that support you assessment