1. Lack of independence
Lack of independence by audit
personnel on the engagement
mandates a disclaimer for lack of
2. Scope of the audit has been restricted
The auditor cannot issue an unqualified opinion on the income statement or the statement of cash flows because a disclaimer of opinion is necessary for the
beginning balance sheet. The auditor may issue an unqualified opinion on the ending balance sheet and a disclaimer of opinion on the income statement, statement of cash flows, and the beginning balance sheet.
Because the client allowed the auditor to expand the scope of his audit and the results were satisfactory, an unqualified opinion is appropriate.
4. Scope of the audit has been restricted
The auditor is not able to satisfy him or herself that inventory is
fairly stated. A qualified opinion is therefore required.
The company has made a decision to follow a different
financing method, which is adequately disclosed. There is no
change of accounting principle.
6. Scope of the audit has been restricted
Highly material or material. We need additional information regarding the
auditor’s preliminary judgment about materiality.
Adverse (if highly material) or Qualified (if material)
The materiality of twenty percent of net earnings before taxes would be sufficient for many auditors to require an adverse opinion. That materiality question is a matter of
- Anonymous1 decade agoFavorite Answer