[VKS]

Becker 02946

Explaination says: “The auditor would modify his/her report, but would not add an emphasis-of-matter paragraph”, So should be a modified or unmodified opinion?

Under U.S. auditing standards, in which of the following situations would an auditor ordinarily issue an unmodified audit opinion without an emphasis-of-matter paragraph?

a. The auditor wishes to emphasize that the entity had significant related party transactions.

b. The entity issues financial statements that present financial position and results of operations, but omits the statement of cash flows.

c. The auditor has substantial doubt about the entity’s ability to continue as a going concern, but the circumstances are fully disclosed in the financial statements.

d. The auditor decides to make reference to the audit of a component auditor as a basis, in part, for the auditor’s opinion.

Explanation

Choice “d” is correct. An auditor would generally issue an unmodified audit opinion without an emphasis-of-matter paragraph when the auditor decides to make reference to the audit of a component auditor as a basis, in part, for the auditor’s opinion. The auditor would modify his/her report, but would not add an emphasis-of-matter paragraph.

Choices “a” and “c” are incorrect. An auditor ordinarily would issue an unmodified opinion with an emphasis-of-matter paragraph if he or she wishes to emphasize that the entity had significant related party transactions, or if the auditor has substantial doubt about the entity’s ability to continue as a going concern (even if the circumstances are fully disclosed in the financial statements).

Choice “b” is incorrect. If the entity issues financial statements that present financial position and results of operations but omit the statement of cash flows, the opinion will be qualified.

FAR 80 (4/2012)
REG 89 (7/2013)
BEC 81 (8/31/13)
AUD 91 (10/26/2013) Done!

[W_HAMILTON]

The opinion itself would be UNMODIFIED; however, the report itself would be modified — a poor choice of words, though, simply “changed” or something along those lines would be better — to include reference to the component auditor.

REG - 93 (7/30/13)
BEC - 90 (8/19/13)
AUD - 98 (8/31/13)
FAR - 84 (10/19/13)

[W_HAMILTON]

The opinion itself would be UNMODIFIED; however, the report itself would be modified — a poor choice of words, though, simply “changed” or something along those lines would be better — to include reference to the component auditor.

REG - 93 (7/30/13)
BEC - 90 (8/19/13)
AUD - 98 (8/31/13)
FAR - 84 (10/19/13)

[VKS]

@W_HAMILTON

Helpful explaination.

Thank you!

FAR 80 (4/2012)
REG 89 (7/2013)
BEC 81 (8/31/13)
AUD 91 (10/26/2013) Done!

[VKS]

@W_HAMILTON

Helpful explaination.

Thank you!

FAR 80 (4/2012)
REG 89 (7/2013)
BEC 81 (8/31/13)
AUD 91 (10/26/2013) Done!

[Author]

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