[miss z MAMA]

NINJA Question –

In which of the following circumstances would an auditor not express an unmodified opinion?

A. There has been a material change in accounting principles between periods.
B. Quarterly financial data required by the SEC has been omitted.
C. The auditor wishes to emphasize an unusually important subsequent event.
D. The auditor is unable to obtain audited financial statements of a consolidated investee.

The correct answer is D.

The explanation says: “The inability to obtain the audited financial statements of a consolidated investee is considered a scope limitation and would be material enough to warrant the use of a qualified opinion.” I thought we should issue a disclaimer?

And why don’t we choose B?

Thanks for your help!

[Anonymous]

The scope limitation can result in a qualified opinion if the effect of the scope limitation is not pervasive and disclaimer if it is. So scope limitation doesn't automatically mean it's a disclaimer, unless they don't provide a rep letter or something….

[I’mAGoingConcern]

A-C would require an Other-Matter or Emphasis-of-Matter paragraph (you could still issue an unmodified opinion, however).

D is the only one that would preclude an unmodified opinion. If it is a consolidated investee, that means that it is a significant portion of the FS. Therefore, the ‘best' opinion that would be able to be given is a Modified Opinion. A Disclaimer of Opinion or even withdrawing completely as a worst case scenario.

Hope this helps!

[miss z MAMA]

thank you guys!!!

[Author]

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