A client has used an inappropriate method of accounting for its pension liability on the balance sheet. The resulting misstatement is material, but the auditor does not consider it to be pervasive. The auditor is unable to convince the client to alter its accounting treatment. The rest of the financial statements are fairly stated in the auditor’s opinion. Which kind of audit report would an auditor most likely issue under these circumstances?
a. Standard unqualified opinion.
b. Qualified opinion due to departure from GAAP.
c. Adverse opinion.
d. No opinion at all.
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