Assume that you are the audit partner on the engagement. Company is manufacturer of racing cars. During the year, the changes in the market resulted in a significant decrease in the demand for the product, which are now being sold significant below cost. Management refuses to write off the products and not disclose this information in the footnotes

1. Identify which of the condition requiring a deviation from a standard unmodified opinion audit report is applicable, if any

2. State the level of materiality as immaterial, material or highly material. If you cannot decide the level of materiality, state the condition information needed to make decision

3. Give the type of audit report that should be issued. If you have not decided on one level of materiality in part 2, state the appropriate report for each alternative materiality level. Describe in detail the type of audit opinion selected