Question

Lance signs a contract with Gerove Corp. to perform an external audit for the company. In his audit, he finds certain minor issues in the firm's financial statements but is of the view that the statements are, nevertheless, an accurate representation of the firm's financial status. In this scenario, Lance is most likely to issue a(n) _____ opinion.

Answer 1

Lance would most likely issue an unqualified opinion, which is given when financial statements are found to be fairly and accurately presented, despite finding minor issues.

Step-by-step explanation:

Lance is most likely to issue a unqualified opinion on the company's financial statements. This type of opinion is issued when an auditor concludes that the financial statements of a company are presented fairly in all material respects in accordance with the applicable financial reporting framework. Minor issues do not warrant a qualification of the audit report, provided they are not material and do not mislead the financial statement users. Therefore, even if there are minor issues, as long as the overall financial statements are accurate, a unqualified opinion, also known as a clean opinion, would be appropriate.