[Isostasy]

Becker Question –

Park, CPA, was engaged to audit the financial statements of Tech Co., a new client, for the year ended

December 31, Year 3. Park obtained sufficient audit evidence for all of Tech’s financial statement items

except Tech’s opening inventory. Due to inadequate financial records, Park could not verify Tech’s

January 1, Year 3, inventory balances. Park’s opinion on Tech’s Year 3 financial statements most likely

will be:

Balance sheet Income statement

a. Disclaimer Adverse

b. Disclaimer Disclaimer

c. Unmodified Adverse

d. Unmodified Disclaimer

Explanation

Choice “d” is correct. When the auditor is unable to satisfy himself or herself regarding the amount of

beginning inventory, he or she must disclaim an opinion on the income statement because of the inability

to verify the cost of goods sold during the year. The auditor may, however, still be able to issue an

unmodified opinion on the balance sheet, since inventory can be verified as of the balance sheet date.

Choices “b”, “a”, and “c” are incorrect, based on the explanation above.

I’m not even sure this relates to piecemeal opinion actually hehe. It came from chapter 1 but on chapter 2 it states that you cannot issue an unmodified opinion on the complete set of f/s and a disclaimer on a single financial statement.

So how can the auditor issue an unmodified opinion on the balance sheet & a disclaimer on the p/l? I thought the answer should be b: disclaimer & disclaimer.

Please help! Thanks 🙂

[Isostasy]

Bump….

I know its a lot to read. …basically I just want to know if its possible to issue different opinions on each financial statement.

[Isostasy]

Bump….

I know its a lot to read. …basically I just want to know if its possible to issue different opinions on each financial statement.

[Anonymous]

I still don't understand this as well….

[Anonymous]

I still don't understand this as well….

[Author]

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