Question

whenever an auditor discovers a highly material GAAP violation in the financial statements that the client...

whenever an auditor discovers a highly material GAAP violation in the financial statements that the client refuses to correct, the auditor should issue a disclaimer of opinion.

a false
b true

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

A) False , auditor has to issue qualified opinion

Disclaimer opinion issues by auditors to financial statements when they could not obtain sufficient and appropriate financial statements to draw the conclusion or support their opinion. There are many reasons why auditors could not obtain sufficient and appropriate supporting documents.

It can be because management does not have enough documents to support their accounting transactions or event. Managements do not have proper control to keep those supporting documents secured and subsequently lost.

There is the intention of the management of the entity not to provide the supporting documents due to a lack of trust in auditor independence

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The auditor completed the audit of financial statements with an unquified opinion. The client company wanted...
The auditor completed the audit of financial statements with an unquified opinion. The client company wanted to make a voluntary disclosure of some supplemental information to the financial statements in the 10-K, and the auditor agreed. However, the auditor found a highly material misstatement in the supplemental information. The client refused to correct the error. Can the auditor still issue a report on the supplemental information? Explain. If yes, what should be the auditor's opinion on the supplemental information, and...
In conducting an integrated audit, an auditor finds a material misstatement. The client makes an adjustment...
In conducting an integrated audit, an auditor finds a material misstatement. The client makes an adjustment so that the financial statements are no longer misstated and the auditor issues an unqualified audit opinion on the financial statements. What do you think is the most likely audit opinion on internal controls, and why?
If the auditor believes that the financial statements prepared on the basis of the entity's income...
If the auditor believes that the financial statements prepared on the basis of the entity's income tax are not adequately titled, the auditor should: A)Issue a resignation of opinion. B)Explain the terminology used in the notes to the financial statements. C)Issue a compilation report. D)Modify the auditor's report to reveal any reservation.
When the auditor concludes that the financial statements are materially misstated and are not prepared in...
When the auditor concludes that the financial statements are materially misstated and are not prepared in accordance with GAAP, should the auditor revise the financial statements since they are there for the shareholders? Why or why not?
After receiving responses to accounts receivable confirmations, the auditor determined that the evidence was not sufficient...
After receiving responses to accounts receivable confirmations, the auditor determined that the evidence was not sufficient to form a conclusion regarding the accounts receivable balance. Which of the following actions should the auditor take next concerning the accounts receivable balance? a. Issue a qualified audit opinion on the client’s financial statements. b. Withdraw from the engagement and issue a disclaimer of opinion. c, Ask the internal auditor to evaluate the valuation of accounts receivable. d. Request additional confirmations and perform...
The auditor’s judgment concerning the overall fairness of presentation of financial position, results of operations, and...
The auditor’s judgment concerning the overall fairness of presentation of financial position, results of operations, and changes in cash flow is applied within the framework of: a.         quality control. b.         generally accepted auditing standards which include the concept of materiality. c.         the auditor’s evaluation of the audited company’s internal control. d.         generally accepted accounting principles To emphasize the fact that the auditor is independent, the addressee of the audit report is usually not: a.         the company’s management. b.         the stockholders of the client company. c.         the board...
19.   Under to PSA 260, those matters that arise from the audit of financial statements and...
19.   Under to PSA 260, those matters that arise from the audit of financial statements and in the opinion of the auditor, are both important and relevant to those charged with governance in overseeing the financial reporting and disclosure process are called a.   Audit matters of governance interest b.   Significant audit matters c.   Auditor findings d.   Material misstatement in the financial statements 20.   Audit matters of governance interest to be communicated to those charged with governance ordinarily include a.   Audit...
A(n) ________ is an auditor's opinion that states that the financial statements are fairly represented except...
A(n) ________ is an auditor's opinion that states that the financial statements are fairly represented except for, or subject to, a departure from Generally Accepted Accounting Principles (GAAPs), a change in accounting principles, or a material uncertainty. A. qualified opinion B. adverse opinion C. disclaimer of opinion D. unqualified opinion
7- Adverse opinion is:         a- clean opinion             b- the FS present fairly except .…         c
7- Adverse opinion is:         a- clean opinion             b- the FS present fairly except .…         c- the FS do not present fairly           d- none of the above              8- Disclaimer opinion is:         a- clean opinion              b- the FS present fairly except .…              c- the FS do not present fairly        d- the auditor is unable to express an opinion              9-Financial statements are:         a- the responsibility of the company's management         b- the responsibility of the auditor            c- the responsibility of the Audit firm   d- none of the above              10-The responsibility...
Audit Analysis 21-1. An auditor has issued a standard report on the comparative financial statements of...
Audit Analysis 21-1. An auditor has issued a standard report on the comparative financial statements of two fiscal years; this report will have . . . a. a single date with a single opinion covering a single two-year period. b. a single date with a single opinion covering two single-year periods. c. two dates with two opinions covering a single two-year period. d. two dates with two opinions covering two single-year periods. 21-2. If the “Basis” section in an auditor’s...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT