14.8 modifi+opinions+ disa

Question 1

why report is modified explained

Answer 1

adtr will modify report to emphasize a certain matter or to express a qualified adverse or disclaimer of opinion. this occurs when

-a matter of significant uncertainty should be brought to the users attention

-adtr was not able to gather sufficient appropriate evidence

-FS materially misstatement

Question 2

emphasis of matter and other matter

Answer 2

1. emphasis of matter does not affect adtr opinion and it is not a KAM
2. applies when resolution of matter depends on future events beyond the entity’s control and may impact FS
3. it is to draw the users attention to a particular note disclosure already included in the FS as they are important for the Users understanding
4. Both emphasis and KAM refer to items already included in FS. if item can be treated as KAM and emphasis of matter, best to be included as KAM as it provide more information
5. separate heading “other matter” may be also included for matters not included or disclosed in the FS e.g adt engagement carried out by another practionner last year or when

Question 3

inability to obtain appropriate adt evidence

Answer 3

1.a limitation scope arises earn adtr no able to carry out necessary adt prdrs or with an imposition by client

2. adtr unable to perform prdrs to obtain sufficient appropriate evidence due to:
   -timing
   -damage to acc records
   -lack of access to key personnel, accounting records required in adt or operating locations
   -absence of adequate accounting records

example : not able to do verify inventory if client does not have reliable perpetual records or even does not hold inventory count

Question 4

qualified opinion

Answer 4

if results are material but not pervasive to FS, then qualified opinion will be issued due to limited scope

Question 5

disclaimer of opinion

Answer 5

if results are material and pervasive, then disclaimer of opinion issued meaning unable to find sufficient appropriate evidence to form opinion

Question 6

opinion para

Answer 6

1.The opinion paragraph is titled to type pf opinion issued

2. basis of opinion description will reflect the type of opinion issued, to explain the matter that led to the modified opinion.

Question 7

disagreement with charged

Answer 7

1. adtr can disagree with those in charge abt matters related with accounting policies and disclosure. e.g those in charge not depreciating as per GAAP. if the mistatament resulted is material but. to pervasive, the adtr will issue a qualified opinion. He may still include an emphasis of matter stating the reason of the disagreement such as not depreciating as per GAAP.adt may still issue qualified opinion even if FS is free of misstatement since departure from Gaap is identified. in some cases the revenue and expenses acc are affected. as such the adtr will issue adverse opinion(other FS items affected)