Cravens Was Asked to Perform the First Audit of a Wholesale

Multiple Choice

Cravens was asked to perform the first audit of a wholesale business that does not maintain perpetual inventory records. Cravens has observed the current inventory but has not observed the physical inventory at the previous year-end date and concludes that the opening inventory balance, which is not auditable, is a material factor in the determination of cost of goods sold for the current year. Cravens will probably

A) Decline the engagement.
B) Express an unqualified/unmodified opinion on the balance sheet and income statement except for inventory.
C) Issue a disclaimer of opinion.
D) Issue an adverse opinion.