Final answer:
The auditors should modify both the Qualified Opinion Section and the Basis for Qualified Opinion Section when qualified opinions are due to inadequate disclosures. These modifications clarify the nature of the omission and its impact on the financial statements.
Step-by-step explanation:
When auditors qualify their opinion on an entity's financial statements due to inadequate disclosure, they should describe the omission in detail. The correct answer to your question is d the Qualified Opinion Section and the Basis for Qualified Opinion Section. These sections are modified to indicate the nature of the limitations and the possible effects on the financial statements.
The Basis for Qualified Opinion Section explains the reasons behind the qualification, detailing the specific areas where the financial statements do not conform to generally accepted accounting principles (GAAP) or applicable financial reporting framework due to inadequate disclosure.
Subsequently, the Qualified Opinion Section reflects a summary of the effects or potential effects of the inadequacies on the financial statements, presenting a clear picture of the auditor's stance, and indicating that the financial statements are fairly presented, except for the matters related to the inadequate disclosures addressed in the Basis for Qualified Opinion Section.