Final answer:
An auditor will issue a qualified or adverse opinion when there's a material non-depreciation of fixed assets, which violates GAAP. A qualified opinion is for specific issues, while an adverse opinion means the financial statements are misleading.
Step-by-step explanation:
True, an auditor will choose between issuing a qualified opinion and an adverse opinion when the balance of fixed assets is material and not being depreciated. If fixed assets are material to the financial statements and aren't being depreciated, this is a departure from Generally Accepted Accounting Principles (GAAP), which would likely prevent the financial statements from being presented fairly. Depending on the severity and pervasiveness of the issue, the auditor may decide to issue a qualified opinion or an adverse opinion. A qualified opinion is issued when the financial statements are presented fairly in all material respects except for a specific issue that does not conform to GAAP. An adverse opinion is issued when the misstatements are so material that the financial statements do not present a fair picture of the entity's financial position and results of operations.