Qualified for misstatement Flashcards
What is the meaning of a qualified opinion for a misstatement relative to GAAP or other applicable financial reporting framework?
The auditor is expressing one or more reservations (specifically about the financial statement presentation; for example, a “GAAP departure”) while still concluding that, except for the specific matter referenced, the financial statements, taken as a whole, are fairly stated and the auditor has obtained sufficient, appropriate audit evidence as a reasonable basis for the auditor’s conclusions.
What type of report should the auditor express when a misstatement is viewed as material and pervasive?
Adverse opinion
What type of report should the auditor express when a misstatement is viewed as material but not pervasive?
Qualified opinion
Give an example of the language used in an auditor’s report for a “qualified opinion” for inadequate disclosure.
- )”In our opinion, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements referred to above present fairly???”
- )The qualification (i.e., reservation) is the phrase “except for???.”