On March 17, 2000, Ross, Sandler & Co., CPAs completed an audit of The Fairfax Corporation's December 31, 1999 financial statements. The firm issued an unqualified opinion. Because of a scope limitation arising from the inability to observe the January 1, 1998 physical inventory, the predecessor auditors. Smith, Ellis & Co., issued a report that contained an unqualified opinion on the December 31, 1998 balance sheet and a qualified opinion on the statements of income, retained earnings, and cash flows for the year then ended. The management of The Fairfax Corporation has decided to present comparative (1999 and 1998) financial statements in their annual report.

Required: 

Prepare an audit report assuming the March 1, 1999 report of Smith, Ellis & Co. is not presented.