Auditors found that the entity has not capitalized a material amount of leases in the financialstatements. When considering the materiality of this departure from GAAP, the auditorswould choose between which reporting options? a. Unmodified opinion or disclaimer of opinion. b. Unmodified opinion or qualified opinion. c. Unmodified opinion with an emphasis-of-matter paragraph or an adverse opinion. d. Qualified opinion or adverse opinion.

Question

Jade

Business

5 September, 20:42

Auditors found that the entity has not capitalized a material amount of leases in the financialstatements. When considering the materiality of this departure from GAAP, the auditorswould choose between which reporting options? a. Unmodified opinion or disclaimer of opinion. b. Unmodified opinion or qualified opinion. c. Unmodified opinion with an emphasis-of-matter paragraph or an adverse opinion. d. Qualified opinion or adverse opinion.

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Answers (1)

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Sloane Hall · Answer 1

B. Unmodified opinion or qualified opinion.

Explanation:

Unmodified opinion is often called a clean opinion, an unmodified opinion is an audit report that is issued when an auditor determines that each of the financial records provided by the entity is free of any misrepresentations. In addition, an unmodified opinion indicates that the financial records have been maintained in accordance with the standards known as Generally Accepted Accounting Principles (GAAP).

On the other hand, a qualified opinion is when a company's financial records have not been maintained in accordance with GAAP but no misrepresentations are identified, an auditor will issue a qualified opinion.