A CPA engaged to audit financial statements observes that the accounting for a certain material, but not pervasive item is not in conformity with the applicable financial reporting framework, although the matter is prominently disclosed in a note to the financial statements. The CPA should Express an unmodified opinion but insert an emphasis-of-matter paragraph with a reference to the note Disclaim an opinion Not allow the accounting treatment for this item to affect the type of opinion because the misstatement was disclosed Qualify the opinion because of the misstatement
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However, this misstatement is not pervasive (meaning it doesn't affect the overall financial statements significantly) and is properly disclosed in a note. Show more…
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Find the report (from 2013 or later) of a publicly held company with an audit opinion that has an Adverse Opinion, a Disclaimer of Opinion, or a Qualified Opinion related to a Going Concern Issue. Explain the going concern audit opinion and the "qualified" audit opinion. Explain how the opinions differ based upon IFRS and GAAP and the implications of SAS 126. Include the audited financial statements. Highlight the opinion. Explain what happened to the company including: - The stock price both before, during, and after the report was issued. - What happened the following year. - Anything else interesting.
Akash M.
1. An audit client has a significant amount of loans receivable outstanding (40% of assets), but has an inadequate internal control system over the loans. The auditor cannot locate sufficient information to prepare an aging of the loans or to identify the collateral for about 75% of the loans, even though the client states that all loans are collateralized. The auditor sent out confirmations to verify the existence of the receivables, but only 10 of the 50 sent out were returned. The auditor attempts to verify the other loans by looking at subsequent payments, but only eight had remitted payments during the month of January, and the auditor wants to wrap up the audit by February 15. The auditor estimates that if only 10 of the 50 loans were correctly recorded, loans would need to be written down by $7.5 million. a. Unmodified b. Modified, qualified c. Modified, disclaimer d. Modified, adverse
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If the financial statements examined by an auditor lead the auditor to issue an opinion that contains an exception that is not of sufficient magnitude to invalidate the statement as a whole, the opinion is said to be unqualified. qualified. exceptional. adverse.
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