Unqualified opinion with a separate explanatory

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Unformatted text preview: n, not for a qualified opinion. 11. CPA-02539 An auditor concludes that a client's illegal act, which has a material effect on the financial statements, has not been properly accounted for or disclosed. Depending on the materiality of the effect on the financial statements, the auditor should express either a(an): a. b. c. d. Adverse opinion or a disclaimer of opinion. Qualified opinion or an adverse opinion. Disclaimer of opinion or an unqualified opinion with a separate explanatory paragraph. Unqualified opinion with a separate explanatory paragraph or a qualified opinion. CPA-02539 Choice "b" is correct. If the financial statements, including accompanying notes, fail to disclose information that is required by generally accepted accounting principles, the auditor should express a qualified or adverse opinion. Choice "a" is incorrect. A disclaimer of opinion is not an appropriate report for inadequate disclosure or a GAAP departure. Choice "c" is incorrect. A disclaimer of opinion or an unqualified opinion with an exp...
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