For each of the following situations, indicate the type of financial statement audit report that you would issue and briefly explain your reasoning. Assume that all companies mentioned are public companies.

1. In prior years, Daffy Co. used first-in-first-out (FIFO) to value its inventory. During the current year, Daffy Co. changed to last-in-first-out (LIFO) to value its inventory. The changed produced a material effect on net income for the current year. The change was adequately disclosed in the notes to the financial statements.