You are the engagement partner for the following clients current year audit and all companies have a financial year end at 31 December 2019:

1. Fortune Company The notes to the financial statements disclose the following:

Since January 2019, the companys travel luggage is guaranteed to be free from defects in materials and workmanship under normal use within a 5-year guarantee period. No provision has been recognized as the amount of the obligation cannot be measured with sufficient reliability.

Sale of travel luggage for the current year was regarded as material.

Required:

Suggest an appropriate auditors report to be prepared. Explain your reasons.