Given the two sets of client circumstances and answer the following questions to issue a proper audit opinion.

During the audit of Valley Corp., you determine that inventory may be misstated. Valley Corp. refuses to allow you to expand your procedures to make an actual determination regarding the misstatement.

Determine if the facts and circumstance require modification of the audit opinion.

Classify the misstatement as immaterial, material or highly material. If you cannot determine the appropriate classification, indicate the additional information needed.

Explain which audit opinion you would issue. If you have not concluded the level of materiality for item 2, explain the appropriate opinion for each level of materiality.

The client has a fleet of trucks. In the past, trucks were purchased and capitalized. Beginning this year, the client has decided to lease the fleet vehicles. The accounting method has been changed to lease capitalization and the policy is fully disclosed in the footnotes.

Determine if the facts and circumstance require modification of the audit opinion.

Classify the misstatement as immaterial, material or highly material. If you cannot determine the appropriate classification, indicate the additional information needed.

Explain which audit opinion you would issue. If you have not concluded the level of materiality for item 2, explain the appropriate opinion for each level of materiality.