The auditor did not observe the entity\'s physical inventory and is unable to be

Question

       The auditor did not observe the entity's physical inventory and is unable to become satisfied about its balance by other auditing procedures.
       Conditions that cause the auditor to have substantial doubt about the entity's ability to continue as a concern are inadequately disclosed.
       There has been a change in accounting principles that has a material effect on the comparability of the entity's financial statements.
       The auditor is unable to apply necessary procedures concerning an investor's share of an investee's earnings recognized on the equity method.

(TCO 2) In which of the following situations would an auditor ordinarily choose between expressing a qualified opinion or an adverse opinion? (Points : 5)

Explanation / Answer

Conditions that cause the auditor to have substantial doubt about the entity's ability to continue as a concern are inadequately disclosed.

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