Question 1

An auditor is performing a review of a nonissuer's financial statements under SSARS. The auditor becomes aware of a material departure from GAAP. Management refuses to correct the departure. The auditor determines that the departure is so pervasive that a modification to the conclusion is not adequate to communicate the deficiencies. What should the auditor do?

Accepted Answer

SSARS Review Rule: Modify (Qualified) if material. Withdraw if Pervasive/Misleading. (Note: Adverse conclusions are rare/not the standard path in SSARS reviews compared to withdrawal).

Question 2

What mistakes do candidates make on this CPA question?

Accepted Answer

Selecting Adverse Conclusion. While an adverse opinion exists in audits, in SSARS reviews, the guidance emphasizes withdrawal when the report would be misleading.

How to approach this question

Full Answer

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