The purpose of this assignment is to assess your ability to evaluate each scenario and then determine the appropriate audit/assurance reports. The ability to evaluate scenarios such as this and to then apply your technical knowledge to the scenario is critical in the public accounting profession. Please submit your answers to the scenarios provided below through a word document in Moodle. Indicate your response with red font. Each scenario response should contain no less than 3-5 sentences.

Problem 18-23: For each of the following independent situations, indicate the reason for and the type of financial statement audit report that you would issue. Assume that each item is at least material.

a. Abadi Mines, Inc., uses LIFO for valuing inventories held in the United States and FIFO for inventories produced and held in its foreign operations.

b. Walker Computers is suing your client, Super Software, for royalties over patent infringement. Super Software's outside legal counsel assures you, and you agree, that Walker's case is completely without merit. Super Software does not disclose any contingency relating to the case.

c. In prior years, Worcester Wool Mills has used current market prices to value its inventory of raw wool. During the current year, Worcester changed to FIFO for valuing raw wool.

d. Upon review of the recent history of the lives of its specialized service trucks, Gas Leak Technology justifiably changed the service lives for depreciation purposes on its trucks from five years to three years. This change resulted in a material amount of additional depreciation expense.