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Assume during the audit of inventory a material uncorrected misstatement was detected. Which type of audit...

Assume during the audit of inventory a material uncorrected misstatement was detected. Which type of audit report are you likely to issue?

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Answer #1

Basically in audit the opinion of auditors on the financial statement is considered to be very important.
Auditor gives his/her opinion in audit report based on the facts found in the financial statements

Audit reports accordingly are of 4 types :

  • qualified opinion,
  • unqualified opinion,
  • disclaimer, and
  • adverse opinion.

Such opinions are provided by the auditor in their audit report after closely examining the financial statement of the organisation.
The audit report which is considered to be the best report is the unqualified opinion.

In the given case where " Assume during the audit of inventory a material uncorrected misstatement was detected ", the audit report that would be given by the auditor is adverse opinion.

As the identified misstatement is pervasive and material.

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