Question - You are the Senior accountant of Toys R Urs Ltd. Daniel, the Managing Director of the company, recently mentioned to you that he found an error in the 2014 financial statements. The ending inventory value of 2014 was found to be overstated by $175,000. Daniel also says to you that ending inventory value reported in the 2015 financial statement is correct. Therefore, Daniels assumes that profit figure for 2015 is correct for Toys R Urs Ltd. Daniel believes that there is nothing to worry about reported profit for both 2014 and 2015.
Required: Do you agree with Daniel? Explain your reasons. (Word Limit: 100 - 150 words)