Items( 1) through (7) present various independent factual situations an auditor might encounter in conducting an audit. List A represents the types of opinions the auditor ordinarily would issue, while List B represents the report modification(if any) that would be necessary. For each situation, select one response form List A and one from List B. Select as the best answer for each item the action the auditor would normally take. The types of opinions in List A and the report modifications in List B may be selected once, or not at all. Assume these conditions: The auditor is independent. . The auditor previously expressed an unmodified opinion on the prior year's financial statements. Only single-year (not comparative) statements are presented for the current year. The conditions for an unmodified opinion exist, unless this contradicts the factual situations. The conditions stated in the factual situations are material. No report modifications are to be made except in response to the factual situations. A. Item: In auditing the long-term investments account, an auditor is unable to obtain audited financial statements for an investee located in a foreign country. The auditor concludes that sufficient competent evidential matter regarding this investment cannot be obtained. Answer: F, L B. Item: Due to recurring operating losses and working capital deficiencies, an auditor has substantial doubt about an entity's ability to continue as a going concern for a reasonable period of time. However, the financial statement disclosures concerning these matters are adequate. Answer: B, I C. Item: A principal auditor decides to take responsibility for the work of another CPA who audited a wholly owned subsidiary of the entity and issued an unmodified opinion. The total assets and revenues of the subsidiary represent 17% and 18%, respectively, of the total assets and revenues of the entity being audited. Answer: B, Q D. Item: An entity issues financial statements that present financial position and results of operations but omits the related statement of cash flows. Management discloses in the notes to the financial statements that it does not believe the statement of cash flows to be a useful financial statement