CPA Aud Quiz
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FORMING CONCLUSIONS AND REPORTING
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An auditor is reading the "Letter to Shareholders" in an annual report and notes that the CEO claims the company opened 50 new retail locations during the year. The auditor's understanding of the business and review of lease agreements indicate that only 15 new locations were opened. This information is not directly related to specific amounts in the financial statements but is quantitatively significant.
How should the auditor classify this issue, and what is the auditor's initial responsibility?
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