Question

Violations of GAAP resulting in qualified opinions affect the standard audit report through which of the following?

a. Modifying the scope paragraph.
b. Adding an explanatory paragraph before the opinion paragraph.
c. Modifying the opinion paragraph to read "except for."
d. Both B and C.
e. All of the above.

Answer 1

Violations of GAAP resulting in qualified opinions affect the standard audit report through both B and C.

Step-by-step explanation:

Violations of GAAP resulting in qualified opinions affect the standard audit report through both B and C.

1. Adding an explanatory paragraph before the opinion paragraph: When there are violations of GAAP, an auditor may add an explanatory paragraph before the opinion paragraph to provide additional information and explain the impact of these violations.
2. Modifying the opinion paragraph to read "except for": If there are material violations of GAAP, the auditor may modify the opinion paragraph to indicate that the financial statements are fairly presented, except for the effects of these violations.
3. Modifying the scope paragraph: The scope paragraph remains unchanged in a standard audit report.

In summary, violations of GAAP resulting in qualified opinions impact the standard audit report by adding an explanatory paragraph and modifying the opinion paragraph to read "except for."