An auditor concludes that a client’s illegal act, which has a material effect on

Question

An auditor concludes that a client’s illegal act, which has a material effect on the financial statements, has not been properly accounted for or disclosed. Depending on the materiality of the effect on the financial statements, the auditor should express either a(n)

a. Adverse opinion or a disclaimer of opinion.

b. Qualified opinion or an adverse opinion.

c. Disclaimer of opinion or an unqualified opinion with a separate explanatory paragraph.

d. Unqualified opinion with a separate explanatory paragraph or a qualified opinion.

please explain the answer

Explanation / Answer

option b is correct.

When financial statements are materially misstated qualified opinion is to be issued.

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