Agree or Disagree (3 marks - 5 minutes) generally 1. It is appropriate to issue a "denial of opinion' when an audit client does not consolidate the accounts of it's subsidiary, which results in a departure from generally accepted accounting principals. 2. An auditor is planning the audit of an existing client. She learns that the client is negotiating the issuance of a new class of preferred shares to a new investor. Materiality should be increased from the prior year