no MOV 1. For the past five years, a public accountant has audited manufacturing company. This year, the examination scope the observation of the annual physical inventory. Required: lifted. opinion" Odver sel tions ( marks) lant has audited the financial statements of a examination scope was limited by the client as to Issue not perva are dall Pracial frame w a. What type of audit report is likely to be issued in the above Situa b. What is the purpose of the opinion section in the auditors repo ose of the opinion section in the auditor's report? Identify the most important information included in this section. (6 marks) 2. Your client - BB Ltd -- has inventory at approximately 50 locations has inventory at approximately 50 locations in four States. The inventory is difficult to count and can be observed only by travelling by car. The internal controls over acquisitions, cash payments and computerised perpetual inventory records are considered effective. This is the fifth vear that you have done the audit, and audit results in past years have been satisfactory. BBLtd is listed on the ASX. The company has achieved excellent results even though the industry as a whole has suffered a dramatic setback in the last two years. Page 5 of 6 18257 How 1223 an in the obtain and L, 100 Uno BUACC5935 Auditing and Assurance Services Question 5 - continued Required: a. Recommend an evidence mix for the five types of tests for the audit of inventory. Justify your answer. Include in your recommendations both tests of controls and substantive tests. (7 marks) b. Is your long relationship with the client a strength or a weakness? Explain. (3 marks) CCLtd's branch in regional Victoria employs around 200 staff