For the following independent situations, assume that you are the audit partner on the engagement.

1. HardwarefromHome.com.au is an internet-based start-up company created to sell home hardware supplies online. Although the company had a promising start, a downturn in e-commerce retailing has affected the company negatively. The companys sales and cash position have deteriorated significantly, and you now have reservations about the ability of the company to continue in operation for the next year.
2. Approximately 20% of the audit of Pine Farms Ltd was performed by a different public accounting firm, selected by you. You have reviewed the accountants working papers and believe they did an excellent job on their portion of the audit. Nevertheless, you are unwilling to take complete responsibility for their work.
3. The controller of City Hotels Company Ltd wont allow you to confirm the receivable balance from two of its major customers. The amount of the receivable is material in relation to Citys financial statements. You are unable to satisfy yourself as to the receivable balance by alternative procedures.
4. In the last three months of the current year, Oil Refining Company Ltd decided to change direction and go significantly into the oil-drilling business. Management recognises that this business is exceptionally risky and could jeopardise the success of its existing refining business, but there are significant potential rewards. During the short period of operation in drilling, the company has had three dry wells and no successes. The facts are adequately disclosed in footnotes.
5. Kieko Ltd has prepared financial statements but has decided to exclude the statement of cash flows. Management explains to you that the users of their financial statements find this statement confusing and prefer not to have it included.
6. Zenos Ltd has prepared its financial statements in accordance with accounting standards. However the directors have included a note explaining that an alternative treatment of a material issue is preferred and that compliance with accounting standards would mislead users of the statements. You have investigated and agree with management.

Required

State the appropriate audit report for each situation from the following choices:

1. Unmodified
2. Unmodified material uncertainty (going concern)
3. Unmodified emphasis of matter
4. Qualified
5. Disclaimer
6. Adverse