James started a new business last year, selling outdoor sports wear and gear for snow sports enthusiast. .

The company suffered a break-in after 9 months of the calendar fiscal year. All of the company's clothes and sporting equipment was stolen including the computer used for the company's accounting system.

Required

1. Explain, with reason(s), whether the situation described above gives rise to a GAAP departure or a
2. scope limitation. (3 marks)
3. Explain with reason(s) the type of audit opinion that would be provided. Be sure tofully explainthe
4. impact on the changes to the standard audit report (unmodified) (7 marks)