Assume you are the partner in charge of the 2020 audit of Dunder Mifflin, a public company. The audit report on the 2020 financial statements has not yet been prepared. In each independent situation following (1-10), indicate the appropriate action (a-e) to be taken. The possible actions are as follows:

a. Issue a standard unqualified report.

b. Qualify the opinion.

c. Issue an unqualified opinion with an explanatory/emphasis of matter paragraph.

d. Issue an adverse opinion.

e. Disclaim an opinion.

1. You are denied permission to inspect the minutes of the Board of Directors of Dunder Mifflin. The minutes of the meetings document significant decisions that were reached by the Board during the year. The companys secretary instead provides you with a certified copy of all resolutions and actions involving accounting matters.
2. Dunder Mifflin records revenues at the time customer orders are placed on the website, rather than when the goods are shipped, which is usually one day after the order is placed. You determined that the amount of orders placed but not shipped as of the balance sheet date is not material.
3. Three weeks before the end of fieldwork, you discover that Dwight Sprout, the audit senior manager on the Dunder Mifflin engagement, owns a material amount of Dunder Mifflins common stock.
4. You were unable to count the substantial undeposited cash receipts at the close of business on the last day of the fiscal year at the companys various branch offices. As an alternative to this auditing procedure used to verify the accurate cutoff of cash receipts, you observed that deposits in transit as shown on the year-end bank reconciliation appeared as credits on the bank statement on the first business day of the new year. You are satisfied as to the cutoff of cash receipts by the use of the alternative procedure.
5. You have substantial doubt about Dunder Mifflins ability to continue as a going concern.
6. Dunder Mifflin had material misstatements that were discovered during the audit. Additional testing was done and you conclude that the misstatements were due to errors, not fraud. Dunder Mifflins management agreed to adjust the financial statements for the misstatements and they are committed to correcting the control deficiencies that led to the misstatements.
7. Two weeks after the balance sheet date, one of Dunder Mifflins warehouses was destroyed by an explosion. The company refuses to disclose this information in a note to the financial statements, but you believe disclosure is required to conform to U.S. GAAP. The amount of the uninsured loss was material, but not highly material.
8. Prior to 2020, the company depreciated its trucks over a 7-year period. During 2020, the company determined that a more realistic estimated life for its trucks was 5 years and computed the 2020 depreciation on the basis of the revised estimate. You are satisfied that the 5-year life is reasonable. The company has adequately disclosed the change in estimated useful lives of its trucks and the effect of the change on the financials within a note to the financial statements.
9. Dunder Mifflin adopted the new leasing standard update (ASU Topic 842) during the year and it had a material impact on the financial statements.
10. Dunder Mifflin carries its land at current market values. Current market values exceed historical cost by a highly material amount (and U.S. GAAP requires historical cost). The effects are pervasive throughout the financial statements.