Reference no: EM132907473

Problem - You have performed an audit of Blaze Incorporated and issued an unqualified opinion. You performed the audit with due professional care and in accordance with generally accepted auditing standards. Two months after the report is issued, you hear on the news that the COO of Blaze, Mr. Crimson, had been stealing small amounts of inventory. The amount, however, is immaterial compared to the overall inventory of the company. You soon receive a call from Blaze's CFO, Ms. Scarlet. Ms. Scarlet wants you to refund your audit fees. Ms. Scarlet thinks you did not properly perform the audit, as you did not discover this fraud. Further, Ms. Scarlet feels that now Blaze's financial statements are not fairly stated because of you. How should you respond to this claim?