, what two scenarios would require the auditor to modify their audit opinion? Does this change...
, what two scenarios would require the auditor to modify their audit opinion? Does this change based on the severity of the circumstance?
Homework Answers
The two scenarios under which an auditor is required to modify his opinion are:
1. The auditor concludes that, based on the audit evidence obtained, the financial statements as a whole are not free from material misstatement.
2.The auditor is unable to obtain sufficient appropriate audit evidence to conclude that the financial statements as a whole are free from material misstatement.
The audit report can be modified based on the severity of the circumstance encountered.
1. Qualified Opinion:
(a) The auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are material, but not pervasive; or
(b) The auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, but the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be material but not pervasive.
2. Adverse Opinion: The auditor shall express an adverse opinion when the auditor, having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are both material and pervasive to the financial statements.
3. Disclaimer of Opinion: The auditor shall disclaim an opinion when the auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, and the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive
Add Answer to:
, what two scenarios would require the auditor to modify their
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