. What type of audit opinion (unmodified, unmodified with emphasis of matter paragraph, disclaimer, qualified or adverse)...

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Accounting

. What type of auditopinion (unmodified, unmodified with emphasis of matter paragraph,disclaimer, qualified or adverse) would be appropriate for each ofthe following independent scenarios?
(a)  Thereis an uncertainty related to a pending exceptional litigationmatter that is adequately disclosed in the notes to the financialstatements.
(b) The client’srecords are inadequate and the auditor is unable to obtainsufficient and appropriate audit evidence.
(c)   Thereis a material uncertainty that casts a significant doubt on theentity’s ability to continue as a going concern and the uncertaintyis adequately disclosed.
(d) There is a GAAPdeparture concerning a highly material ledger balance.
(e) The client willnot allow the auditor to contact the client’s legal counselregarding a pending legal matter.
(f)   The client’s accounting records have been destroyed by a flood.
(g) There is amisstatement in the client’s inventory account - the misstatementis deemed to be material but not pervasive to the financialstatements.

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4.1 Ratings (783 Votes)

a A matter is appropriately presented in the financial statement but the auditor in his opinion feels that he should draw the users attention to such information by way of an additional communication In such case an emphasis of matter paragraph is included in the auditors report Here an uncertainty related to pending exceptional litigation matter is appropriately disclosed But a separate disclosure or drawing attention over the issue See Answer

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Transcribed Image Text

. What type of auditopinion (unmodified, unmodified with emphasis of matter paragraph,disclaimer, qualified or adverse) would be appropriate for each ofthe following independent scenarios?(a) Thereis an uncertainty related to a pending exceptional litigationmatter that is adequately disclosed in the notes to the financialstatements.(b) The client’srecords are inadequate and the auditor is unable to obtainsufficient and appropriate audit evidence.(c) Thereis a material uncertainty that casts a significant doubt on theentity’s ability to continue as a going concern and the uncertaintyis adequately disclosed.(d) There is a GAAPdeparture concerning a highly material ledger balance.(e) The client willnot allow the auditor to contact the client’s legal counselregarding a pending legal matter.(f) The client’s accounting records have been destroyed by a flood.(g) There is amisstatement in the client’s inventory account - the misstatementis deemed to be material but not pervasive to the financialstatements.