2. Audit situations 1 through 7 present various independent factual situations an auditor might encounter in conducting an audit. For each situation, select from the following list the most appropriate type of opinion the auditor would issue. Items from the list may be selected once, more than once, or not at all. a. Qualified b. Unqualified c. Adverse d. Disclaimer Assume the following: The auditor is independent. The conditions stated in the factual scenario are material. . Factual Scenario: 1. The financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows in conformity with GAAP. 2. In auditing the Long-Term Investments account, an auditor is unable to obtain audited F/S for an investee located in a foreign country. The auditor concludes that sufficient competent evidential matter regarding this investment cannot be obtained but it is not pervasive to the financials as a whole. 3. Due to recurring operating losses and working capital deficiencies the auditor has substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time. However, the F/S disclosures are adequate. 4. The principal auditor decides to refer to the work of another auditor, who audited a wholly owned subsidiary of the entity and issued an unqualified opinion. 5. An entity changes its depreciation method for production equipment from SL to units of production based on hours of utilization. The auditor concurs with the change, although it has a material effect on the comparability of the entity's Fs. 6. An entity discloses certain lease obligations in the notes to the F/S. The auditor believes that the failure to capitalize these leases is a departure from GAAP 7. The entity wishes to show comparative F/S and include the prior year. GAAP. Accordingly, management corrected the prior year GAAP deficiency and However, the prior year F/S contained a qualification due to an inappropriate method of included the updated numbers in the comparative financials for the current year