Prior to beginning or accepting an audit assignment, the auditor will assess the risk to the firm they represent. Of particular concern is the risk the auditing firm will be exposed to, both professionally and legally, in the event of a poorly received audit opinion. What is the impact of Materiality upon the auditor's interpretation of risk for a given client. Required: Suppose Ernst and Young (E & Y) are appointed as the auditors to Emaar Properties, a large UAE conglomerate that is heavily vested in the real estate and construction industry. During the course of the audit, the manager of the E&Y audit team, who is the person responsible for reviewing lease agreements as part of the audit of Emaar Properties, discovers two material misstatements in the accounts. You are required to advise the management of Emaar Properties on the accounting treatment of both of the following terns The auditor, E&Y is concerned that management of Emaar Properties has not given enough importance to the material misstatements in the financial reports. If management fails to act on the correct treatment of the issues in (1) above, explain the alternate audit report that the auditor may be forced to issue to Emaar Properties? 03 (12pt) 4 THE QE