ExpertMedium1 markMultiple Choice
CPA · Question 70 · Area IV: Reporting
An auditor is auditing the financial statements of a nonissuer. The auditor is unable to obtain sufficient appropriate audit evidence regarding a material foreign investment due to government restrictions. The possible effects of undetected misstatements could be material and pervasive. What is the appropriate opinion?
An auditor is auditing the financial statements of a nonissuer. The auditor is unable to obtain sufficient appropriate audit evidence regarding a material foreign investment due to government restrictions. The possible effects of undetected misstatements could be material and pervasive. What is the appropriate opinion?
Answer options:
A.
Qualified Opinion.
B.
Adverse Opinion.
C.
Disclaimer of Opinion.
D.
Unmodified Opinion with Emphasis of Matter.
How to approach this question
Scope Limitation Matrix: Material/Not Pervasive = Qualified. Material/Pervasive = Disclaimer.
Full Answer
C.Disclaimer of Opinion.✓ Correct
Disclaimer of Opinion.
When a scope limitation is pervasive, the auditor cannot obtain sufficient appropriate evidence to base an opinion on, resulting in a disclaimer.
Common mistakes
Confusing Adverse (Bad numbers) with Disclaimer (Unknown numbers).
Practice the full CPA AUD Practice Exam 4
78 questions · hints · full answers · grading
More questions from this exam
Q01A CPA firm is performing an audit of a nonissuer, TechInnovate Inc. The engagement partner's spou...HardQ02An auditor is performing an audit of an issuer, Global Corp, in accordance with PCAOB standards. ...HardQ03A CPA is performing an audit of a county government entity that receives federal financial assist...HardQ04During the audit of an employee benefit plan subject to ERISA, the auditor discovers that the pla...HardQ05An auditor is evaluating the 'integrity' principle of the AICPA Code of Professional Conduct. Whi...Medium