Indicate the effect of the circumstances on the auditor

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Assume that the following separate circumstances could be sufficiently material to require the expression of a qualified opinion:

1. Management wanted to reduce the allowance for doubtful debts by $5 million. The auditor did not agree and felt that it should stay at its current level.
2. The auditor was engaged to audit the client after the entity's year-end, so the auditor could not observe the inventory count that was held at year-end.
3. The entity is a defendant in a major litigation (relating to a faulty product) that has not been settled as of the date of signing the auditor's report.
4. A fire in the company's office because of a faulty photocopier has destroyed all records of accounts receivable as at year-end.

Problem 1: Indicate the effect of the above circumstances on the auditor's report.

Reference no: EM132734628

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