For each of the following independent and material circumstances, identify the type of audit opinion required and explain the basis of your answer. (1) Your client changes its method of accounting for the cost of inventories from FIFO to weighted average cost. You agree with the change, although it has a material effect on the financial report and your client has not disclosed this information. Audit opinion (2 marks) Explanation (1 mark) (ii) I Due to significant losses and adverse key financial ratios, the auditor has substantial doubt about a client's ability to continue as a going concern for a reasonable period of time. The client has adequately disclosed its financial difficulties in a note to its financial report, which does not include any adjustments that might result from the outcome of this uncertainty. Audit opinion (2 marks) Explanation (1 mark) (iii) There was a fire that broke out a month before the year end. The fire destroyed most of the accounting records and underlying receipts, invoices and payment documents. Management has reconstructed accounting records using its bank statement and other means, but they are uncertain if all material matters have been taken into account and they would like to wait for a couple of months until subsequent receipts are received, which may assist them to compile further outstanding items. You have serious doubts as to the accuracy of the compiled figures and have been unable to verify any of the material balances. Audit opinion (2 marks) Explanation (1 mark)