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Audit issues: Qualified opinion or disclaimer
Audit issues: Qualified opinion or disclaimer
The auditor uses professional judgment to determine whether to issue a qualified opinion or a disclaimer of opinion.
A qualified opinion due to an audit problem should be expressed when the auditor is unable to obtain sufficient appropriate audit evidence on which to base an opinion and the auditor concludes that the possible effects of any undetected misstatements could be material but not pervasive.
A disclaimer of opinion should be expressed when the auditor is unable to obtain sufficient appropriate audit evidence on which to base an opinion and the auditor concludes that the possible effects of any undetected misstatements could be both material and pervasive. A disclaimer of opinion should also be expressed if the auditor is not independent or if the financial statements are unaudited.
Disclaimer of opinion
Disclaimer of opinion
Nonissuer reports
Nonissuer reports
When the auditor expresses a qualified opinion or disclaimer of opinion, the auditor's report will include a modified "Basis for Opin ion" paragraph and a "Qualified Opinion" or "Disclaimer of Opinion" paragraph, as appropriate. A disclaimer of opinion will also include a modification to the "Auditor's Responsibilities for the Audit of the Financial Statements" section of the auditor's report.
Qualified opinion
Qualified opinion
Issuer reports
Issuer reports
When the auditor expresses a qualified opinion or disclaimer of opinion, a paragraph immediately following the opinion paragraph is added and the opinion paragraph is modified. A qualified opinion and disclaimer of opinion will include modified language in the Basis for Opinion section. The auditor is not required to report critical audit matters in the auditor's report when the auditor expresses a disclaimer of opinion.
Qualified opinion
Qualified opinion
Disclaimer of opinion
Disclaimer of opinion
Auditor's report summary
Auditor's report summary
Nonissuers
Nonissuers
Issuers
Issuers
🧮 Practice Problem: LO1-06, MCQ-02452
🧮 Practice Problem: LO1-06, MCQ-02452
Under which of the following circumstances would a disclaimer of opinion not be appropriate?
The auditor is unable to determine the amounts associated with an employee fraud scheme.
Management does not provide reasonable justification for a change in accounting principle.
The chief executive officer is unwilling to sign the management representation letter.
🧮 Practice Problem: LO1-06, MCQ-14944
🧮 Practice Problem: LO1-06, MCQ-14944
When qualifying an opinion due to an inability to obtain sufficient appropriate audit evidence, an auditor of a non issuer should include the reasons for that inability to obtain sufficient information in:
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