Question 6 – Audit opinions For each of the followingfour independent scenarios, indicate: • the type of audit opinionyou would express in your audit report; • the reason(s) supportingyour choice of opinion; and • which ASA (number is sufficient) mostinfluences your choice. (a) Slocum Limited has changed its methodof valuing closing inventory for the current financial reportingperiod from first-in-first out to weighted average. Inventory is amaterial proportion of Total Assets for Slocum Limited and theeffect of the change has been a material increase in the year-endvalue of inventory. Those charged with governance have signed-offthe change and disclosed the reason as a truer reflection of netincome (profit) by better matching revenue and costs. As an auditoryou have had extended discussions on the issue with the auditcommittee and are satisfied with the disclosures. Type ofopinion: Reason(s): Supporting ASA number: (b) Joshua Pty. Ltd. isa long-time large proprietary company client of your practice,operating a charter fleet of houseboats. For the current financialreporting period, a new financial director has convinced the Board,to change the method of determining the useful lives of thecompany’s fleet of houseboats – the most material asset on theirbalance sheet. The effect has been a material reduction of thedepreciation expense and consequent impact on the net income(profit) for the period. In your professional opinion the change isnot justified, however, you have been unable to convince ThoseCharged with Governance. The change has been adequately disclosedin accordance with AASB 108. Type of opinion: Reason(s):Supporting ASA number: (c) Helping Hand is a not-for-profitproviding support for the disadvantaged in your local region. Aspart of your professional firm’s corporate social responsibilityobligations, they provide pro-bono audit services to Helping Hand.Your audit documentation shows sufficient and appropriate auditevidence has been obtained for material financial statement itemswith the exception of a portion of the revenue account.Approximately 40% of Helping Hand’s revenue is raised by solicitingdoor-to-door cash contributions by volunteers, several times duringthe year. Your evidence supports the effective operation ofinternal controls over cash once it is received at headquarters. Type of opinion: Reason(s): Supporting ASA number: (d)Pillager Limited is a retail audit client. A global pandemic hasseen a dramatic decline in their trading activity for the currentfinancial reporting period. They have been fortunate to be able tomitigate the impact to some extent by adopting some tradingactivity to their currently developing online platform and takingadvantage of government support programs. The resulting cash flowdifficulties have required successful renegotiation of an alreadyfully drawn borrowing facility with their bank. Those charged withgovernance are adamant company remains viable and have also drawnup contingency plans for capital expenditure cutbacks, additionaloff-balance sheet finance options & further options forre-scheduling current borrowing obligations. All these details havebeen disclosed in a going concern note included with SignificantAccounting Policies in their annual financial report. Your reviewof this key audit matter led you to conclude the going concernassumptions of management are sound. Type of opinion:Reason(s): Supporting ASA number: