Use the following to provide the
type of audit report the auditors generally should issue in the situations
presented below:
1.Unmodified—standard.
2.Unmodified—with an
emphasis-of-matter paragraph.
3.Qualified.
4.Adverse.
5.Disclaimer
Situation:
Client-imposed restrictions
significantly limit the scope of the auditors’ procedures, and they are unable
to obtain sufficient appropriate audit evidence. The possible effects on the
financial statements of undetected misstatements, if any, could be both
material and pervasive.
The auditors decide not to make
reference to the report of a component auditor that audited a portion of group
financial statements.
The auditors believe that the
financial statements have been presented in conformity with generally accepted
accounting principles in all respects, except that a loss contingency that
should be disclosed through a note to the financial statements is not included.
While they consider this a material omission, they do not believe that it pervasively
affects the financial statements.
The client has changed from LIFO
to FIFO for inventory valuation purposes; the auditors concur with this change.
The effect is considered material to the financial statements, although
inventory is not a large part of total assets.
The client has changed from LIFO
to FIFO for inventory valuation purposes; the auditors do not concur with this
change. The effect is considered material and pervasive.
ScholarMatic: Explanation & Answer
Your ready answer from a verified tutor is just a click away for as little as $14.99
Click Order Now to get 100% Original Answer Customized to your instructions!
