Additional Section or Paragraph Other Report Required: How would each of these issues affect Stanford's report on the client's financial statements? Opinion on the Part Financial Statements Section Basis for Opinion Section Critical Audit Matters Section 1. 2. 3456 6.

Assume that Stanford CPAs encountered the following issues during its various audit engagements for issuers in 2023: Stanford conducted the audit of Luck, a new client, this past year. Last year, Luck was audited by another CPA, who issued an unqualified opinion on its financial statements. Luck is presenting financial statements for 2022 and 2023 in comparative form. One of Stanford’s clients is RealCo, a real estate holding company. Assume that RealCo experienced a significant decline in the value of its investment properties during the past year because of a downturn in the economy and has appropriately recognized that decline in market value under GAAP. Stanford wishes to emphasize the decline in the economy and its impact on RealCo’s financial position and results of operations for 2023 in its audit report. For the past five years, Stanford has conducted the audits of TechTime, a company that provides technology consulting services, and has always issued unqualified opinions on its financial statements. Based on its 2023 audit, Stanford believes that an unqualified opinion is appropriate; however, Stanford did note that TechTime reported its third consecutive operating loss and has experienced negative cash flows because of the inability of some of its customers to promptly pay for services received. Trees Inc. presents condensed financial information along with its financial statements. The condensed financial information has been derived from the complete set of financial statements that Stanford has audited (and issued an unqualified opinion on the complete financial statements). Stanford believes that the condensed financial information is fairly stated in relation to Trees’ complete financial statements. Stanford believes that some of the verbiage in Plunkett’s Management Discussion & Analysis section is inconsistent with the firm’s financial statements. Stanford has concluded that Plunkett’s financial statements present its financial position, results of operations, and cash flows in accordance with GAAP and has decided to issue an unqualified opinion on Plunkett’s financial statements. Oil Patch is a client in the energy industry that is required to present supplementary oil and gas reserve information. Stanford has performed certain procedures regarding this information and concluded that it is presented in accordance with FASB presentation guidelines and does not appear to depart from GAAP. Based on Stanford’s audit, it plans to issue an unqualified opinion on Oil Patch’s financial statements. Required: How would each of these issues affect Stanford’s report on the client’s financial statements?