After the year-end, one of the company's factories and part of the administration building was destroyed by fire. The company's warehouse is not affected. Inventories records were destroyed too. The closing inventory at year-end is at RM1 000 000. The auditor has relied on the inventory-count at year-end and past year's working papers to verify the inventories at balance sheet date. This has been properly disclosed in the notes to the accounts. Profit before tax is RM10 000 000. 

Discuss the implication of each issue on the audit report, including an assessment of whether it is material.