Opinion Examples

Question 1

The chief executive officer is unwilling to sign the management representation letter.

Answer 1

disclaimer of opinion

Question 2

The auditor is unable to determine the amounts associated with an employee fraud scheme.

Answer 2

disclaimer of opinion

Question 3

Management does not provide reasonable justification for a change in accounting principle.

Answer 3

qualified or adverse opinion

Question 4

An auditor was unable to obtain sufficient appropriate audit evidence concerning certain transactions due to an inadequacy in the entity’s accounting records.

Answer 4

Disclaimer of opinion and a qualified opinion

Question 5

The client refuses to permit the auditor to confirm certain accounts receivable or apply alternative procedures to verify their balances.

Answer 5

disclaimer of opinion

Question 6

Inadequate disclosure of a material related party transaction

Answer 6

qualified or adverse opinion

Question 7

an auditor is unable to determine whether management’s estimate of the effects of future events is reasonable, and the effect of those events is believed to be material

Answer 7

qualified opinion or a disclaimer of opinion

Question 8

The auditor obtained sufficient appropriate audit evidence and concludes that misstatements are material but not pervasive to the financial statements.

Answer 8

qualified opinion

Question 8

The auditor obtained sufficient appropriate audit evidence and concludes that misstatements are both material and pervasive to the financial statements.

Answer 8

adverse opinion

Question 9

The auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, and the auditor concludes that the possible effects on the financial statements of undetected misstatements could be both material and pervasive.

Answer 9

disclaimer of opinion

Question 10

The auditor obtains sufficient appropriate audit evidence and concludes that the financial statements are presented fairly.

Answer 10

unmodified (unqualified) opinion

Question 11

The company issues financial statements that purport to present financial position and results of operations, but it refuses to include the related statement of cash flows.

Answer 11

qualified or adverse opinion

Question 12

Management refuses to allow the auditor to contact legal counsel.

Answer 12

qualified or disclaimer of opinion

Question 13

The financial statements do not adequately disclose litigation that is probable to result in a material loss.

Answer 13

qualified or adverse opinion

Question 14

A client has capitalizable leases but refuses to capitalize them in the financial statements.

Answer 14

Adverse opinion

Question 15

Management’s refusal to provide written representations.

Answer 15

disclaimer of opinion

Question 16

Inadequate disclosure of material information.

Answer 16

adverse opinion

Question 17

Inadequate disclosure of material information.

Answer 17

adverse opinion

Question 18

The auditor is unable to obtain the audited financial statements of a consolidated investee.

Answer 18

qualified opinion or a disclaimer of opinion

Question 19

If a publicly held company issues financial statements that purport to present its financial position and results of operations but omits the statement of cash flows

Answer 19

Qualified opinion

Question 20

The auditor is unable to determine the amounts associated with an employee fraud scheme.

Answer 20

disclaimer of opinion

Question 21

The chief executive officer is unwilling to sign the management representation letter.

Answer 21

disclaimer of opinion

Question 22

Management does not provide reasonable justification for a change in accounting principle.

Answer 22

qualified or adverse opinion

Question 23

The client refuses to permit the auditor to confirm certain accounts receivable or apply alternative procedures to verify their balances.

Answer 23

disclaimer of opinion

Question 24

The financial statements contain a material departure from generally accepted accounting principles

Answer 24

qualified opinion

Question 25

The auditor is not independent with respect to the audited entity.

Answer 25

disclaimer of opinion

Question 26

An auditor of a nonissuer concludes that a client’s illegal act, which has a material effect on the financial statements, has not been properly accounted for or disclosed.

Answer 26

Qualified opinion or an adverse opinion.