The annual reports of three major United States corporations contained departures from the auditor's standard report because of the following notes to financial statements:

R.J. Reynolds Industries, Inc.

{Notes to Financial Statements \\ Note C一}

Commitments and Contingencies In July 19X1, two civil actions purporting to be class actions were brought against the six major United States cigarette manufacturers, including the Company, and others, by certain tobacco farmers alleging violations of the antitrust laws and seeking damages aggregating approximately \(\$ 2.5\) billion plus attorneys' fees and costs. Both actions are in their early stages and investigation of the facts is not complete. Counsel has advised the Company, based on its investigation and the formal discovery to date, that in its opinion these cases are not proper class actions and the Company has substantial factual and legal defenses to the charges made. Accordingly, the Company has made no provision for this matter in its financial statements.

{Notes to Financial Statements}

Dow Chemical Company B. Inventories-In 19X1, the Company abandoned its historical worldwide practice of valuing inventories on the first-in, first-out basis in favor of the last-in, first-out basis in order to more effectively match current costs and revenues. If the LIFO method had not been adopted, inventories at December \(31,19 X 1\) would have been \(\$ 993\) million, or \(\$ 271\) million greater than the carrying value at that date. The effect of the change was to reduce earnings per share by \(\$ 1.53\).

{Accounting Change}

The Goodyear Tire and Rubber Company In accordance with a recent ruling of the Financial Accounting Standards Board, research and development expenses were excluded as an element of cost used for pricing inventory. This has been done on a retroactive basis and consequently prior years have been restated. Inventories and taxes have been decreased by \(\$ 20,853,000\) and \(\$ 9,692,000\), respectively at December \(31,19 \times 1\) and \(19 \times 0\). The effect of this change on \(19 \times 1\) and \(19 \times 0\) income was not significant.

{Required:}

Write the explanatory and opinion paragraphs of the auditor's report for each company.