122k views
3 votes
In which one of the following cases would an auditor most likely issue a qualified opinion?

a. There is a highly material, and very pervasive departure from SFAS No. 141 and No. 142.
b. There is a change in accounting principles promulgated by the FASB.
c. There is an immaterial dollar misstatement on the financial statements.
d. There is one material departure from GAAP that is affects only two accounts.

1 Answer

4 votes

Final answer:

An auditor would most likely issue a qualified opinion for a financial statement that has one material departure from GAAP affecting only two accounts as it indicates material misstatements that do not pervade the entire financial statements.

Step-by-step explanation:

An auditor would most likely issue a qualified opinion in cases where the financial statements deviate from generally accepted accounting principles (GAAP) but the overall financial statements are presented fairly. Therefore, the correct answer is: d. There is one material departure from GAAP that affects only two accounts.

A qualified opinion indicates that, except for the effects of the matter to which the qualification relates, the financial statements give a true and fair view. This is typically issued when there is a limitation on the scope of the audit or when there is a material misstatement that does not pervade the financial statements as a whole. A highly material and very pervasive departure from GAAP, as mentioned in option a, would likely result in an adverse opinion or a disclaimer of opinion. A change in accounting principles, as long as these are properly accounted for and disclosed (option b), would not typically lead to a qualified opinion. An immaterial misstatement (option c) would generally not affect the auditor's opinion.

User Vivek Mehta
by
8.4k points