Client 2. Stocks worth TZS.5 million were valued at cost in the financial statements. The review of the events after the reporting date indicated that not all the stocks could be sold in the normal course of business. Some were damaged and some have become obsolete and slow moving. The total assets of the Company are TZS. 20 million. If the stocks were valued at net realizable value, the value would have been reduced by TZS.2.0 million. The Directors have refused to allow the stocks to be valued at lower of cost and net realizable value and valued all the stocks at cost. Client 3. Management refused to allow auditors to carry out circularization of debtors. The receivables figure was material in the financial statements. In addition, the auditors have not received a reply to the letter of enquiry sent to the Company's solicitors in respect of a major litigation affecting the Company. The auditors assessed that the effect of the two items is both material and pervasive. Client 4. Subsequent events indicated that a major debtor has become insolvent. The amount involved was material. The directors of the entity have refused to recognize an allowance for a write-off of the amount. Required: (i) For each of the items above, explain with reasons the type of audit opinion to be issued. (ii) Explain the action that should be taken by the auditors against management after refusing to allow auditors to carry out the necessary audit procedures (May 2019, B3) 8. You are completing the audit of Kizibo Ltd where the overall materiality level is TZS 25,000,000 for the year ended 30th June 2018 . During the course of the audit, you have discovered that the directors of Kizibo had not revealed about one of the locations where a physical inventory count took place on 30th June 2018 . The value of inventory held on this premises is included in the draft accounts at a value of TZS 27,400,000. Required: Outline how the above scenario will impact on the audit report if the auditor cannot carry out alternative audit procedures to determine the existence of the inventory in the unrevealed location. (Nov 2018, C2)