Final answer:
If auditors issue a disclaimer or adverse opinion on the complete set of financial statements, the firm may separately report on a material element, account, or item by fulfilling specific conditions.
Step-by-step explanation:
If auditors issue a disclaimer or adverse opinion on the complete set of financial statements, the firm may separately report on an element, account, or item in the financial statements if the following conditions are met:
The element, account, or item is material to the financial statements, and its separate reporting is necessary to present a true and fair view.
The firm discloses in the separate report that the auditors have issued a disclaimer or adverse opinion on the complete set of financial statements.
The separate report includes a description of the nature and extent of the auditors' disclaimer or adverse opinion.
The separate report is clearly identified as separate from the audited financial statements.
By fulfilling these conditions, the firm can provide additional information about a specific element, account, or item to address concerns raised by auditors' disclaimer or adverse opinion on the complete set of financial statements.
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