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In: Accounting

Given reference to SAB 99, post a response to the following: You have discovered 2-3 uncorrected...

Given reference to SAB 99, post a response to the following: You have discovered 2-3 uncorrected misstatements: (1) management has taken the position that the misstatements are not material and (2) the auditor’s argument is that the uncorrected misstatements are material. Which argument is stronger and will carry more weight? Why? How will you decide?

Solutions

Expert Solution

Though the management may feel that the misstatements are not material from their point of view it should be the final decision of the Auditor to decide the materiality of the misstatements .

It is so said because the management may not always be giving the correct or proper information which is at times done to deceive the public and does not include few items giving false Clarification's. But as we all are very well aware that the Auditor should be independent and unbiased, in this case I'll support the argument of the Auditor from general public point of view keeping in mind their interests.   

In the above argument it is also mentioned that the misstatements are uncorrected which means though in spite the misstatements are found by the Auditor, the management have not rectified them and this adds to support my opinion that the management is not acting properly.  

Hence , I hereby support my opinion in the argument that the Auditor's argument is proper.

ekkarill92 answered 2 years ago
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