The accounting firm of Aschari and Di Tomaso was engaged to perform an audit of the financial statements of Pammenter Inc. During the audit, Pammenters senior managers refused to give the auditors the information they needed to confirm any of the accounts receivable. As a result, Aschari and Di Tomaso were not able to confirm the accounts receivable balance. However, they did not encounter any other problems during the audit. Situation 2 The accounting firm of Jovanovic and St. Pierre has discovered, during its audit of Robson Chemicals Inc., that the client is being sued for $3 million. Allegedly, one of its products exploded and severely injured a customer. In the firms discussion with Robsons lawyers, Jovanovic and St. Pierre ascertained that it is very likely that Robson will indeed have to pay this entire amount when the lawsuit is resolved. To provide for this, Robsons chief financial officer has included information relating to the lawsuit in the notes to its financial statements, but did not otherwise reflect it in its financial statements. Answer the following questions.

Situation 1 a

Using Situation 1 what type of audit opinion could be issued?

Unqualified

Unqualified with emphasis of matter paragraph regarding the confirmation of accounts receivable

Qualified due to a scope limitation

Qualified due to a GAAP departure

Adverse opinion

Denial of opinion