Question

Describe the alterations from the standard report when a scope limitation has occurred, and the auditors have issued a qualified opinion.

a) Inclusion of an emphasis-of-matter paragraph
b) Modification of the opinion and addition of a basis for qualified opinion paragraph
c) Issuance of an adverse opinion
d) No alterations are made to the standard report

Answer 1

When a scope limitation occurs and auditors issue a qualified opinion, the standard report undergoes alterations including the inclusion of an emphasis-of-matter paragraph and modification of the opinion. No alterations are made to the standard report in the case of an adverse opinion.

Step-by-step explanation:

When a scope limitation has occurred and auditors have issued a qualified opinion, there are several alterations to the standard report.

1. Inclusion of an emphasis-of-matter paragraph: This paragraph is added to draw attention to a matter that is appropriately presented or disclosed in the financial statements. It explains the nature of the limitation and its impact on the audit.
2. Modification of the opinion and addition of a basis for qualified opinion paragraph: The auditors modify the opinion section of the standard report to include a qualified opinion and provide a paragraph explaining the basis for the qualification.
3. No alterations are made to the standard report: This option is not applicable when a scope limitation has occurred and a qualified opinion is issued.