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Which of the following representations does an auditor make explicitly when issuing an unmodified (unqualified) opinion on public company financial statements?

a) Conformity with PCAOB standards
b) Adequacy of disclosure
c) Both a and b
d) None of the above

User Clement T
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1 Answer

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Final answer:

An auditor issuing an unmodified (unqualified) opinion confirms both the conformity with applicable accounting standards and the adequacy of disclosures in the financial statements.

Step-by-step explanation:

When an auditor issues an unmodified (unqualified) opinion on public company financial statements, they are making explicit representations about both the conformity of the financial statements with accounting principles generally accepted in the United States (or other applicable frameworks) and the adequateness of disclosures. Therefore, the correct answer is c) Both a and b. An unqualified opinion indicates that the financial statements present fairly, in all material respects, the financial position and results of operations of the company, and the audit has been conducted in accordance with Public Company Accounting Oversight Board (PCAOB) standards. This includes confirming that there is adequate and clear disclosure of all material information pertinent to the financial statements.

User Alexandru Chirila
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