Problem: Sydney International Fine Jewelers Ltd is a retailer of high priced jewelry to local and international clients. Examination of purchase invoices indicates that the jewelry items in closing inventory have a cost price of $3.1 million. However, the inventory has been revalued to $3.8 million. The company supports this valuation increase by showing you a report from Imogen Smyth-Benton, a professional jeweler, who is a member of the Jeweler's Association of Australia (JAA). While your audit firm does not have expertise in valuing jewelry, you are satisfied about Smyth-Benton's level of expertise. What type of audit report should you issue?
The answer suggests to issue a qualified opinion, but why so?
Since the inventory can be valued at the lower of cost and net value.
Besides, will be the expertise affect the opinion to be unqualified or qualified?
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