In which case might an auditor of an issuer render a

In which case might an auditor of an issuer render a qualified opinion on internal control?
I. When there is a scope
limitation.
II. When there is a
material weakness in
internal control.
a.
Both I and
II.
b. II only.
c. I only.
d.
Neither I
nor II.
Explanation
Choice "d" is correct. A scope limitation requires the auditor to disclaim an opinion or withdraw
from the engagement, and a material weakness in internal control requires the auditor to issue an
adverse opinion. Neither situation would result in a qualified opinion.
Choice "c" is incorrect. A scope limitation requires the auditor to disclaim an opinion or
withdraw from the engagement.
Choice "b" is incorrect. A material weakness in internal control requires the auditor to issue an
adverse opinion.
Choice "a" is incorrect. A scope limitation requires the auditor to disclaim an opinion or
withdraw from the engagement, and a material weakness in internal control requires the auditor
to issue an adverse opinion. Neither situation would result in a qualified opinion.

Gail is auditing the financial statements of Hoefener Home Improvements, a publicly held
company. Gail notes several deficiencies in internal control, and is trying to determine whether
each deficiency constitutes a significant deficiency or a material weakness. Which best describes
the framework Gail should use in making this evaluation?
Choice "d" is incorrect. A significant deficiency exists for weaknesses that are important enough
to merit the attention of those responsible for financial reporting.