[Anonymous]

If the auditor is unable to be there for the beginning inventory procedures and inventory is material, then the audit opinion would be to be qualified. Is that correct? Is it for a non issuer and an issuer.

The opinion would not be unmodified with an emphasis of matter paragraph.

Also, there was no indication that it is pervasive. You would have trouble getting COGS without beginning inv but I am not sure if that counts. Would it be adverse?

[Anonymous]

anyone want to help?

[MIsconnie]

If alternative procedures can be performed to gain evidence about opening inventory balances then it would not preclude an unmodified opinion. However, if the auditor cannot apply alternative procedures the auditor can only opine on the balance sheet as COGS could not be verified. So to answer, it depends if the auditor can apply alternative procedures.

[FK122]

If the auditor is unable to gather sufficient appropriate audit evidence, whether through audit procedures or analytical procedures, on the opening balance of Inventory, then the auditor cannot express on opinion on the Income Statement or Statement of Cash Flows since COGS cannot be verified. Therefore, the auditor can only opine on the Balance Sheet Statement (as of Balance Sheet Date)

[Anonymous]

no alternative procedures, but for this q, there were only opinions listed so I assume it would be the qualified “except for”

[FK122]

yes, it would be qualified with an except for paragraph stating in essence what I described above.

it wouldn't be adverse (departure from GAAP) bc management isn't refusing to include it in the audit.

[Joetse]

Yup. Qualified GAAS on Cash Flows and Income Statement. Unqualified for Balance Sheet.

[Author]

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