Final answer:
The audit report contains an Explanatory Paragraph After the Opinion Paragraph and no Qualification if financial statements have a material, unjustified departure from GAAP.
Step-by-step explanation:
The correct answer is c. A Qualification: No; An Explanatory Paragraph After the Opinion Paragraph: Yes.
When financial statements contain a material, unjustified departure from GAAP (Generally Accepted Accounting Principles), the audit report will typically include an Explanatory Paragraph After the Opinion Paragraph to provide an explanation for the departure. This explanatory paragraph helps users of the financial statements understand the nature and impact of the departure.
However, if the departure is considered to be so significant that it renders the financial statements as a whole unreliable, the auditor may also issue a Qualification in the audit report. A qualification indicates that the financial statements are not presented fairly in accordance with GAAP due to the departure.