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On January​ 2, 2020, the Retail Auto Parts Company received a notice from its primary supplier...

On January​ 2, 2020, the Retail Auto Parts Company received a notice from its primary supplier that effective​ immediately, all wholesale prices will be increased by 10 percent. On the basis of the​ notice, Retail Auto Parts revalued its December​ 31, 2019, inventory to reflect the higher costs. The inventory constituted a material proportion of total​ assets; however, the effect of the revaluation was material to current assets but not to total assets or net income. The increase in valuation is adequately disclosed in the footnotes.

a. State the condition (either change in accounting principle, failure to follow GAAP, none, reporting involving other auditors, or scope of the audit has been restricted)

b. State the materiality level (either Material, immaterial, highly material, material or highly material, or not applicable)

c. List any additional information needed (either amount of loss, auditor's preliminary judgement, client explanation in a memo, or the size of the misstatement)

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