On January 31, As are Toy Manufacturing hired your firm to audit the company's financial statements for the prior year. You were unable to observe the client's inventory on December 31. However,you were able to satisfy yourself about the inventory balance using other auditing procedures.f. Gelato Bros., Inc., leases its manufacturing facility from a partnership con-trolled by the chief executive officer and major shareholder of Gelato. Your review of the lease indicates that the rental terms are in excess of rental terms for similar buildings in the area. The company refuses to disclose this related- party transaction in the footnotes.g. Johnstone Manufacturing Company has used the double- declining balance method to depreciate its machinery. During the current year, management switched to the straight- line method because it felt that it better represented the utilization of the assets. You concur with its decision. All information is adequately disclosed in the financial statements.