[Anonymous]

Which of the following is true about a report on a specific element of a financial statement?

A. An audit of the complete financial statements is required.

B. An unmodified opinion may not be expressed if an adverse opinion or disclaimer of opinion was expressed on the complete financial statements.

C. There should be a reference to both GAAS and GAAP in the report.

D. A restrictive use paragraph is required.

The answer is C.. I first selected answer B. Answer B is also true!! WTF??!! Audit hurts my brain. :'( help!

[Biff-1955-Tannen]

Is it possible that you can express an unmodified opinion as long as the report is not presented along with the report on the complete financials?

AUD 93 Jan 16
BEC 83 Feb 16
FAR 83 Apr 16
REG 84 May 16

99% Ninja MCQ only

[CPA2BEE]

B is only true under the condition that the unmodified opinion on the single element is expressed in the same report as the financial statements taken as a whole, which is not the case because the question specifically states “a report on a specific element of a financial statement”, indicating that the report pertains only to the single element. So in this case, an adverse or disclaimer of opinion could still be expressed on the FS taken as a whole, in a separate report. Given all that, C should be the correct answer.

Good ol' Auditing, don't ya hate it!?

FAR - 80
AUD - 82
BEC - 80
REG - 85

ETHICS - 90
EXPERIENCE - COMPLETE
Application for California license mailed 8/4/2016

[Anonymous]

I thought you couldn't express an unmodified opinion on a specific element if you expressed an adverse/ disclaimer opinion on the complete set of FS. That would contradict the adverse opinion. No piecemeal opinions, right?

[Anonymous]

@CPABEE Yeah, I think answer B is wrong because the “IF” condition. lol maybe

[CPA2BEE]

If both the unmodified and adverse/disclaimer were presented in the same report, then B is right. But the question is talking about “a report on a specific element of a financial statement,” not “a report on a complete set of financial statements”. Therefore, the auditor can issue an unmodified opinion because the scope of the report only covers the specific element, not the FS taken as a whole.

Its not really an “IF” scenario in this question, this is the way the AICPA expects us to interpret the questions on exam day. Its rough with Audit.

FAR - 80
AUD - 82
BEC - 80
REG - 85

ETHICS - 90
EXPERIENCE - COMPLETE
Application for California license mailed 8/4/2016

[Author]

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