The auditors' report on the entity's financial statements included an additional paragraph disclosing a difference of opinion between the auditors and the entity for which the auditors believed an adjustment to the financial statements should be made. The opinion paragraph of the auditors' report should express a (n)

A. unmodified opinion.

B. qualified opinion citing a departure from generally accepted accounting principles.

C. qualified opinion citing a scope limitation and lack of specific evidence.

D. disclaimer of opinion.

Question

Business

Janet Ho

6 March, 08:11

The auditors' report on the entity's financial statements included an additional paragraph disclosing a difference of opinion between the auditors and the entity for which the auditors believed an adjustment to the financial statements should be made. The opinion paragraph of the auditors' report should express a (n)

A. unmodified opinion.

B. qualified opinion citing a departure from generally accepted accounting principles.

C. qualified opinion citing a scope limitation and lack of specific evidence.

D. disclaimer of opinion.

+2

Answers (1)

Know the Answer?

Anne Rivera · Answer 1

The correct answer is B. qualified opinion citing a departure from generally accepted accounting principles.

Explanation:

The basis for an audit opinion is the evidence obtained by the auditor, who performs the audit procedures to gather such evidence. Generally, the auditor examines evidence based on selective evidence. In carrying out the audit tests, the auditor evaluates the appropriateness of the accounting principles used, the significant accounting estimates made, as well as the complete presentation of the financial statements.

The auditor should use his professional judgment in conjunction with his knowledge of the specific circumstances of the Company to determine, what tests to apply, when to apply them and how much to submit to tests.