[PrinceofDubtown]

Becker’s Audit B Sim #4 reads as follows:

“LOSE Big Inc, a US Company, is a defendant in a lawsuit alleging infringement of certain patent rights. However, ultimate outcome of the litigation cannot be reasonable estimated by management. Janice Jones, CPA, believes there is a reasonable possibility of a significantly material loss, but the lawsuit is adequately disclosed in the notes to the financial statements.

Select which opinion types can be used.”

The answer given in the answer key, per Becker, is “issue the independent auditor’s report about modification.” I know that this is one option, however, the book (on page A1-24) says that an auditor also has the option of disclosing an uncertainty related to the outcome of unusually important litigation or regulatory action. As such, shouldn’t that also be a right answer? Did becker get it wrong? Any help would be appreciated.

FAR - 92 (7/13)
AUD - 98 (10/13)
REG - 92 (7/14)
BEC - 95 (8/14)