Question

A modification of the standard report is required for all of the following conditions except:

A) there is a restriction on the scope of the engagement.

B) the presence of a material weakness at the end of the period.

C) management has concluded that internal controls are effective.

D) the auditor was not able to apply all the procedures necessary.

Answer 1

The modification of a standard report is required for all of the given conditions except when management has concluded that internal controls are effective.

Step-by-step explanation:

The correct answer is C) management has concluded that internal controls are effective.

The modification of a standard report is required for all of the given conditions except when management has concluded that internal controls are effective. In this case, the standard report can be used without any modifications because the internal controls are deemed effective.

For example, if a company undergoes an audit and the management has concluded that the internal controls are effective in ensuring accuracy and reliability of the financial statements, then there is no need for any modifications to the standard report.