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North Face Case Solution Essay

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1. Should auditors insist that their clients accept all proposed audit adjustments, even those that have an “immaterial” effect on the given financial statements? Defend your answer.

The auditors should not insist that their clients accept all proposed audit adjustments. The auditor’s main duty is to provide reasonable assurance to verify the accuracy and compliance of client’s financial statements, to ensure that it conveys data and information of events occurred within the accounting period. When a misstatement is found, the auditor should decide whether the misstatement is material, considering both amount and quality perspectives. If it is a material misstatement, the auditor should mainly insist in making proper adjustments, because the misstatement will have a direct effect on financial statements and thus affect decisions of people who rely on i...

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