In connection with your audit of Z Company for the year ended December 31, 19XX, you find that as a result of an improper cutoff of inventory shipments at the end of the year, approximately \(\$ 6,000\) of sales applicable to the subsequent year were recorded in the current year. During the current year, sales totaled \(\$ 5\) million, and net income was \(\$ 850,000\). Management of \(\mathrm{Z}\) Company refuses to adjust the financial statements for the \(\$ 6,000\) error.

a. What position would you take with the management of \(\mathrm{Z}\) Company regarding the correction of this error? How would you explain your position?

b. Draft the audit report you will issue, assuming that you are satisfied with the financial statements otherwise.