The following are material independent situations.

a)MNC's subsidiary has a subordinated loan which has been guaranteed by the parent, MNC. It was unclear at balanced date whether the subsidiary will be in a position to repay the loan on its own. This matter was not referred to in the draft annual report.

b)XYZ Pty Ltd is in poor financial health and unlikely to be able to continue into the foreseeable future in your eyes. The directors, however, believe they can pay all their debts as and when they fall due.

c)ABC company leases all its machinery and equipment. At the expiration of the leases full title will pass to ABC. The leases have been treated as off-balance sheet transactions.

d)DEF experienced a fire at its premises before year end and much of their documentation and records were destroyed.

Required:

Mention the appropriate audit report to be issued in each case and justify your answer.