ACCT4702 Question 3 A. B. C. In terms of an independent auditor's report, explain 'modified' audit report. (2 marks) Relate TWO (2) circumstances under which an auditor would issue a 'modified' audit opinion. (4 marks) For each situation below, describe implications for an independent auditor's report: i. Sandy Beach Hotel is being sued by a competitor for theft of intellectual property. The amount of the claim is material and the case could go either way. This claim is not mentioned anywhere in the financial statements. ii. HanLue Company is a cash retailer and there is nothing to confirm the accuracy of cash sales. iii. Calvin Company has neglected to include a statement of profit and loss in its financial statements. D. When does an auditor issue a 'disclaimer' audit report? (12 marks) (2 marks) (Total 20 marks)