Unqualified Audit Opinion The following companies wish to receive an unqualified audit opinion so they can issue additional securities at advantageous rates. In discussing their status with the external auditor, the following situations came to light:

a. Tumble Company purchased $600,000 of merchandise for resale during the period and still owes the supplier

$80,000 at year-end.

b. A lightning strike at the general headquarters of Fry Company deleted part of the memory in Fry’s mainframe computer system and scrambled much of the remaining information. After approximately two weeks of audit work, the auditor concluded that it would be impossible to verify the accuracy of many of Fry’s transactions during the current year.

c. An error was made in recording accounts receivable of Grove Company. Rather than reporting the correct balance of accounts receivable of $15,000 and total assets of

$105,000, the balance sheet reports accounts receivable of

$510,000 and total assets of $600,000.

d. Stopper Company reports merchandise on hand of

$950,000 and total assets of $2,550,000. Although audit standards require auditors to verify the existence of the merchandise, the auditors of Stopper Company were, due to an airline strike, unable to travel to New Zealand to verify the existence of $400,000 of the merchandise. The auditors believe the company has good internal controls and the merchandise is correctly reported.

For each of these situations, determine which type of audit opinion the auditor would be expected to provide, and give justification for your answer.