CPA · Question 14 · Area IV: Forming Conclusions and Reporting
An auditor is reviewing the minutes of the board of directors meetings of a nonissuer. The auditor discovers that the board authorized a significant guarantee of a loan for a related party. This guarantee was not disclosed in the financial statements. The auditor considers this omission to be material. Management refuses to amend the financial statements. What is the appropriate audit opinion?
Answer options:
Unmodified Opinion with an Emphasis-of-Matter paragraph.
Qualified or Adverse Opinion.
Disclaimer of Opinion.
Unmodified Opinion, but communicate the matter to the Audit Committee.
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