[Anonymous]

I was wondering if someone could help me wrap my head around piecemeal opinions? I know you can issue an unmodified/unqualified opinion on the balance sheet, and a disclaimer on the rest of the financial statements if you aren’t able to obtain evidence to provide an opinion on the beginning account balances, but I’m confused on how that works with piecemeal opinions not being allowed by GAAP?

I would really appreciate it if someone could explain that to me.

[SchruteBeet]

Piecemeal opinion basically means giving a certain opinion on one “thing” and a different, contradicting opinion on another “thing”. Now let's get into the specifics. The general rule is that piecemeal opinions are not allowed. However, there are 2 exceptions to this when you are auditing specific elements of the financial statements. (1) If the opinion on the specific element is published separately or (2) if the specific element is not a major portion of the entire set of financials. To give you an example, let's say I am auditing the set of financial statements for a company and I have also been asked to provide an opinion on say, the accounts receivable. Now, let's say I issue an adverse opinion on the entire set of financials but an unmodified opinion on the receivables. The only time that I issue a separate opinion on the financials and the receivables is if I either issue the two audit reports separately (so my investors are not confused by my contradicting opinions and the unmodified opinion on receivables doesn't overshadow the fact that the overall financials still have a adverse opinion) or if the receivables doesn't comprise a majority of financial statement elements.

Note however, that piecemeal opinions are not allowed at all on single financial statement audit. No exceptions to that. This means that if I have an unmodified opinion on my balance sheet but an adverse opinion on all other financials, my opinion will still be adverse. I cannot go opinion shopping and pick and choose which financials get which opinion.

Hope this helps!

[Skynet]

Piecemeal opinion us like when you girl asks you if she looks Fat in this dress. Rather than giving her an honest answer, you tell her her hair looks nice instead.

[Author]

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