ExpertHard1 markMultiple Choice
CPA · Question 37 · Area IV: Reporting
An auditor is performing a review of interim financial information for an issuer. The auditor finds that the interim data does not comply with GAAP. Management refuses to correct it. The auditor should:
An auditor is performing a review of interim financial information for an issuer. The auditor finds that the interim data does not comply with GAAP. Management refuses to correct it. The auditor should:
Answer options:
A.
Express an adverse opinion on the interim information.
B.
Modify the review report to describe the departure.
C.
Withdraw from the engagement immediately.
D.
Issue a disclaimer of opinion.
How to approach this question
Distinguish Review (Modification of conclusion) from Audit (Qualified/Adverse Opinion).
Full Answer
B.Modify the review report to describe the departure.✓ Correct
Modify the review report to describe the departure.
For a review of interim financial information (PCAOB AS 4105 / AU-C 930), if there is a material departure from the applicable financial reporting framework, the auditor should modify the report to describe the departure. The terminology 'Adverse Opinion' is reserved for audits.
Common mistakes
Using audit terminology (Adverse Opinion) for a review engagement.
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