You are the controller of Small Toys Inc. Mutahir Kazmi, the president, recently mentioned to you that he found an error in the 2023 financial statements that he believes has now corrected itself. In discussions with the purchasing department, Mutahir determined that the 2023 ending inventory was understated by $1 million. However, the 2024 ending inventory is correct. Mutahir assumes that 2024 profit is correct and comments to you, “What happened has happened—there’s no point in worrying about it now.”

Instructions
You conclude that Mutahir is wrong. Write a brief, tactful email to him that clarifies the situation.