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How should you deal with this issue in the audit report

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Problem - Lane Cove Classic Automobiles Ltd sells rare and expensive vintage cars. As your audit firm has no expertise in valuing such cars, you employ Chloe Smith, a recognised expert on vintage cars, to value them for you and give you a report. Chloe's report indicates that the inventory of cars is worth $8.3m while the accounts show inventory at the cost price of $6.4m. The client refuses to adjust the figures as they believe the market for vintage cars is volatile and they do not want to risk overvaluing the cars. Materiality for the client is $800,000. How should you deal with this issue in the audit report?

a) Issue a qualified audit opinion with an emphasis of matter paragraph to draw the users' attention to the inventory valuation issue.

b) Issue an unqualified audit opinion with an emphasis of matter paragraph to draw the users' attention to the inventory valuation issue.

c) Issue an unqualified audit opinion.

d) Issue a qualified audit opinion and discuss the inventory valuation.

Reference no: EM132452980

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