Question

A client decides not to correct misstatements communicated by the auditor that collectively are not material and wants the auditor to issue the report based on the uncorrected numbers. Which of the following statements is correct regarding the financial statement presentation?A. The financial statements contain uncorrected misstatements that should result in a qualified opinion.B. The financial statements are free from material misstatement, but disclosure of the proposed adjustments is required in the notes to the financial statements.C. The financial statements are not in accordance with the applicable financial reporting framework.D. The financial statements are free from material misstatement, and no disclosure is required in the notes to the financial statements.

Answer 1

D. The financial statements are free from material misstatement, and no disclosure is required in the notes to the financial statements.

Step-by-step explanation:

Because the misstatements are immaterial in aggregate, they will not influence the economic decisions of the users of the financial statements. Therefore, the financial statements are considered free from material misstatement.

There will be no need to disclose these immaterial misstatements in the financial statements. Further, because of the immateriality, they will not result into a qualified opinion.

Based on the above, option D is the correct option.