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Critically explain the type of audit opinion

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Question - Brakes and Disc Co (Brakes) is manufacturer of braking systems for use in domestic and commercial motor vehicles. Total assets for year was Rs37 million and profit before tax for the year was Rs9 million. A customer of Brakes had withdrawn one of their car models due to earnest concerns over the braking system. The customer has lodged a legal claim against Brakes for Rs11 million. The company's lawyer believed that there is an 80 % chance that Brakes will lose the case. The directors believed that Brakes quality control procedures have always been robust, and the braking system will be proven to have been safe. They decided to disclose the matter in notes to accounts.

Critically explain the type of audit opinion that should be issued in each of the above situations.

Reference no: EM132541215

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