Question

Which statement is most correct regarding the opinion on internal controls over financial reporting (ICFR)?

1) The opinion is modified if one or more material weaknesses in ICFR are identified or there is a restriction on the scope of the auditor's work.
2) The opinion is only modified if there is a restriction on the scope of the auditor's work.
3) The opinion is only modified if one or more material weaknesses in ICFR are identified.
4) The opinion is only modified if one or more material misstatements are identified.

Answer 1

The most correct statement regarding the opinion on internal controls over financial reporting (ICFR) is option 1) The opinion is modified if one or more material weaknesses in ICFR are identified or there is a restriction on the scope of the auditor's work.

Step-by-step explanation:

The most correct statement regarding the opinion on internal controls over financial reporting (ICFR) is option 1) The opinion is modified if one or more material weaknesses in ICFR are identified or there is a restriction on the scope of the auditor's work.

A material weakness refers to a deficiency in internal control that has a reasonable possibility of resulting in a material misstatement in the financial statements. If such weaknesses are identified, the auditor's opinion on ICFR is modified to reflect the existence of these weaknesses.

On the other hand, if there is a restriction on the scope of the auditor's work, it means that the auditor was unable to obtain sufficient appropriate evidence to form an opinion on ICFR. In this case, the auditor's opinion is also modified.