Which one is not a phrase in the audit report critical to understanding the limits of the report?

reasonable assurance

material

present fairly

reliability

Under which of the following set of circumstances, the auditor CANNOT issue an unqualified opinion with an explanatory paragraph to emphasize the matter for his public client company?

The auditor decides to make reference to the work of another auditor as a basis, in part, for expressing an opinion.

The financial statements are affected by an alternative accounting treatment that is a departure from GAAP. The use of GAAP would cause the statements to be misleading.

The company changed its method of valuing inventory, but management did not have appropriate justification for the change. The change is properly disclosed in the financial statements.

The auditor wishes to emphasize the acquisition of newly acquired companies.