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

1. The management of Gina Berhad has decided to exclude the statement of cash flow from their financial statements because they believe that their bankers do not find the statement to be very useful.

2. A month after the year-end date, a major customer of Warni Berhad declared bankruptcy. The customer had confirmed the balance due to your client at the balance sheet date. The management of Warni berhad refused to charge off the account or disclose the information. The receivables represent approximately 25% of account receivables.

3. You have been appointed as company auditor of Fariz Berhad one month after financial year end. You were unable to confirm accounts receivable with client's customers. However, because of detailed sales and cash receipts records, you were able to perform reliable alternative audit procedures.

4. Sri Sdn. Bhd changed its method of computing depreciation for property plant and equipment. They did not disclose about the changes in the financial statements. The effect in future years is likely to be material, but agreed with the changes.

Required:

For each situation above;

1. Identify condition requiring a deviation from standard unqualified audit report, if any.
2. State the level of materiality as immaterial, material or highly material.
3. State the most appropriate audit report to be issued.

(6 marks)