Auditing-1, ACCT2007, George Brown college,Toronto,Ontario,Canada

Premier Forest Limited (PFL) is an integrated lumber company operating in Ontario and Quebec. Total sales in 2020 were $825,000,000. Due to high duties imposed on exports to the United States, PFL expects to lose a quarter of its sales for the next five years.

In the face of this, PFL has temporarily shut one of its sawmills. The sawmill was built in 2007 at a cost of $250,000,000. At the time, it was estimated to have a 25-year life. PFL uses straight-line depreciation and has estimated that salvage value less remediation costs will be zero. They have argued that by shutting down the plant for five years they do not need to depreciate it since it is not being used.

Required

State what type of audit report should be issued. Briefly explain your rationale.