QUESTION 2 For each of the independent situations presented below, state what type of audit report should be issued. Briefly explain your rationale. (Hint: include a discussion of the effect materiality might have on the type of audit report to be issued), (4 MARKS) A. J&K, CPAs, were engaged to perform an audit of the financial statements of Ryan Inc. The management of Ryan Inc. would not allow the auditors to attend the inventory count. All other audit procedures were performed as considered necessary by J&K and no other problems were discovered However, J&K were unable to satisfy themselves as to the balance in inventory B. Young and Wilson, CPAs, were engaged to perform an audit of the financial statements of J&J Co. The client has recorded $25,000 of revenue in this year's financial statements which relate to the next fiscal year. Management refuses to adjust the financial statements