Scope Limitation Facts: Because of the late appointment (i.e. on October 1, 2017) of your audit firm to an initial audit engagement, you are unable to observe the client's opening (i.e. December 31, 2016) physical inventory for the year ended December 31, 2017. Your audit firm is also unable to perform other substantive procedures and is not satisfied as to the fairness of the opening inventory balance as of December 31, 2016. Questions: 1. 2. What are the 2 Audit Report options for this scope limitation situation? Rather than issuing a scope limitation report on a full set of financial statements for the year ended December 31, 2017, in practice, is there a cleaner, simpler alternative? What is it? (Hint: Issue less than a full set of financial statements.) Change in Accounting Principles Facts: During the year you are auditing, the client changed its method of accounting for inventories from FIFO to LIFO, disclosed this change in the footnotes to the financial statements and, from a mechanical standpoint, treated the change properly. However, your audit firm does not agree with the rationale for the change and believes the change was really made to report a higher level of earnings. . Questions: 1. Should you issue a modified Opinion? Why or why not? 2. If you believe a Modified Opinion is appropriate, which kind should you issue