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During the planning stage of the audit of Link Co, the auditor judged that an error of $30,000 was likely to be material to profits, and planned tests and samples accordingly. The only errors found as a result of the planned audit work were two items of inventory, each overvalued by $5,000. The finance director is unwilling to adjust the accounts except to avoid a modified audit report. What action should the auditor take? A. Accept the accounts as they stand, because the errors are not material. B. Insist that the accounts are adjusted, because errors of fact must be corrected for the accounts to be 'true and fair'. C. Consider whether the errors found indicate the possibility of further, material errors in areas of the population not sampled. D. Insist that the client re-performs the inventory valuation. |