Question $2$

$(20$ marks total$)$

Audit Reports

The following are separate circumstances that face an auditor when determining

the appropriate type of audit opinion to provide:

$1$ Your client's financial position has significantly deteriorated from last year and

the financial forecast provided by your client suggests this will continue.

$2$ Your Caf$$ client has poor controls over cash revenue.

$3$ Your client has made an impairment adjustment to the carrying value of an

intangible asset on its balance sheet. You believe they have materially

underestimated the impairment.

$4$ Your retail client has refused to perform an inventory count at balance date.

$5$ Your client has stated its inventory at cost and not at the lower of cost and net

realisable value.

Required:

For each of the above situations state the specific type of audit opinion you

consider would be most appropriate. Provide full reasoning for your answers.