Final answer:
When aggregated misstatements exceed overall materiality, the auditor must take appropriate action, which could include proposing adjustments, requiring management to correct the issues, or ultimately issuing a qualified or adverse opinion if the issues are not resolved.
Step-by-step explanation:
When the aggregated misstatements are greater than the overall materiality, the auditor should take action to ensure that the financial statements do not include material misstatements.
The auditor's responsibility is to propose adjustments or require management to correct the misstatements. If the management refuses to make the corrections, the auditor may need to issue a qualified or adverse opinion depending on the pervasiveness and significance of the misstatements.
In such cases, this represents a significant discrepancy that could impact the credibility and reliability of the financial statements. The auditor should assess whether the financial statements provide a true and fair view and if they are free from material misstatement, whether due to fraud or error.
When aggregated misstatements exceed the materiality threshold, it highlights a risk that the financial statements may mislead the users of the financial statements, which can have serious consequences for the company in question.