Ok, am I mis-reading this question:
In an integrated audit of a nonissuer, an auditor should issue an adverse opinion on the effectiveness of an entity's internal control in which of the following situations?
A.
The financial statements are misstated.
B.
A material weakness exists.
C.
The entity may not continue as a going concern.
D.
The auditor was asked by the client to provide the report to another practitioner.
The correct answer given is B, but what I have an issue with is the reason why:
PCAOB Auditing Standard 5 requires that the existence of a material weakness in internal control results in an adverse opinion. The statement must include an understanding of internal controls, assessing the risk of material weaknesses, testing and evaluating the design and operating effectiveness, and performing any other procedures.
The question asks about a nonissuer, but the reason given in the answer says “PCAOB Auditing Standard 5.” Doesn't PCAOB standards only relate to issuers?? (I chose A, btw).
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