What are the three conditions that require a departure from an unmodified opinio
ID: 2609582 • Letter: W
Question
What are the three conditions that require a departure from an unmodified opinion audit report? Give an example of each.
Begin by selecting the three conditions requiring a departure from an unmodified opinion audit report. Then select an example of each, referencing the example by the corresponding letter in the list of possible examples.
Example
a.
The auditor also provides tax services for the client's business.
b.
The auditor is friends with someone on the board of directors of the client's business.
c.
The auditor owns stock in the client's business.
d.
The client insists on using replacement costs for fixed assets.
e.
The client values fixed assets at historical cost.
f.
The client values inventory at historical cost.
g.
The client will not permit the auditor to confirm material receivables.
Conditions requiring a departure from an unmodified opinion audit report
Example
The auditor has not been paid- a,b,c,d,e,f,g
The autitor is not independent
The financial statements have not been prepared in accordance with GAAP
The other auditors are independent
The scope of the audit has been restricted
There is a lack of consistent application of GAAP
a.
The auditor also provides tax services for the client's business.
b.
The auditor is friends with someone on the board of directors of the client's business.
c.
The auditor owns stock in the client's business.
d.
The client insists on using replacement costs for fixed assets.
e.
The client values fixed assets at historical cost.
f.
The client values inventory at historical cost.
g.
The client will not permit the auditor to confirm material receivables.
Conditions requiring a departure from an unmodified opinion audit report
Example
The auditor has not been paid- a,b,c,d,e,f,g
The autitor is not independent
The financial statements have not been prepared in accordance with GAAP
The other auditors are independent
The scope of the audit has been restricted
There is a lack of consistent application of GAAP
Explanation / Answer
Answer:
The three conditions requiring a departure from an unqualified report are:
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