Question 1

Scenario: An auditor is auditing the financial statements of a nonissuer. The auditor identifies a material misstatement in the opening balances that affects the current period's financial statements. The prior period was audited by another auditor, and the predecessor's report is not reissued. Management refuses to adjust the opening balances.

What is the appropriate audit opinion on the current period financial statements?

Accepted Answer

Opening Balance Error -> Affects Current Year Income/Equity. If not fixed -> GAAP Departure -> Qualified/Adverse.

Question 2

What mistakes do candidates make on this CPA question?

Accepted Answer

Thinking the auditor only disclaims on the opening balance.

How to approach this question

Full Answer

Common mistakes

Practice the full CPA AUD Practice Exam 3

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