Question

In: Accounting

1. The auditor could not obtain sufficient appropriate evidence for one material account. 2. The financial...

1. The auditor could not obtain sufficient appropriate evidence for one material account.
2. The financial statements as a whole are not presented fairly in accordance with the applicable financial reporting framework.
3. The client does not permit inquiry of outside legal counsel. The effects of this inability to obtain sufficient appropriate evidence are pervasive.
4. Management imposed certain limited restrictions on the scope of the audit.
5. The financial statements were presented fairly, in all material respects.
6. The auditor has not performed an audit sufficient in scope to enable her to form an opinion.

Chose from

Unmodified

Qualified

Adverse

Disclaimer

Expert Solution

1) Qualified

2) Adverse

3) Disclaimer

4) Disclaimer

5) Unmodified

6) If the auditor has not been able to apply the procedures she considers necessary, the auditor should qualify his or her opinion or disclaim an opinion because of a limitation on the scope of the audit.

Explanation:

A.Unmodified opinion

An auditor expresses an unmodified audit opinion when he concludes that the financial statements of an entity are prepared in accordance with the applicable financial reporting framework, considering all the material aspects. Auditor expresses an unmodified audit opinion when in his opinion and based on the information provided to him and audit evidence obtained by he considers that the financial statements of an entity give a true and fair view.

B. Qualified opinion

The auditor shall express a qualified opinion when he concludes that unqualified opinion cannot be expressed and the misstatements individually or in aggregate are material but not pervasive as to require an adverse opinion or the limitation of scope is not material as to require a disclaimer of opinion.

C. Adverse opinion

An auditor expresses an adverse opinion when he considers that the misstatement is so material and pervasive that a qualification of the report is not adequate to disclose such misstatements of financial statements. The auditor shall express an adverse opinion after obtaining sufficient and appropriate audit evidence. Thus, on the basis of such evidence, he concludes that the misstatements, individually or in aggregate are material and pervasive to the financial statements.

D. Disclaimer of opinion

An auditor expresses a disclaimer of opinion when he is unable to obtain sufficient and appropriate audit evidence. Another reason is that he considers that the undetected misstatements could be both material and pervasive. The auditor should disclaim an opinion when there is a limitation on the scope effect of which is both material and pervasive and he is unable to obtain sufficient and appropriate audit evidence.

ekkarill92 answered 1 year ago

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