Trotman, Inc., a manufacturing company, has engaged a CPA to audit its financial statements for the year ended June 30, year 2. The CPA observed the physical inventory count at June 30, year 2, but no physical inventory had been taken at June 30, year 1. The CPA has not been able to become satisfied as to the value of the inventory at June 30, year 1. Assuming that the financial statements are fairly presented in all other material respects, the CPA should:
A. Express an unqualified opinion on the financial statements taken as a whole; no mention of the scope limitation is necessary.
B. Disclaim an opinion on the statements of income, retained earnings, and cash flows but express an unqualified opinion on the balance sheet.
C. Express an unqualified opinion on the financial statements taken as a whole but clearly indicate in a separate paragraph of the report the limitations on the work.
D. Disclaim an opinion on the statements of income and retained earnings but express an unqualified opinion on the balance sheet and the statement of cash flows.