Which of the following is not an appropriate reporting option when component auditors are involved in the audit of group financial statements, assuming that the component auditors' work did not identify any issues affecting the group auditors' report?
A)Issue a standard (unmodified)report that does not reference any involvement by the component auditors.
B)Identify the component auditors by name and present their report along with the group auditors' report.
C)Refer to the component auditors' work and disclose the extent of their work in the group auditors' report.
D)Disclaim an opinion on the portion of the financial statements examined by the component auditors.

Question

Quizplus · Accepted Answer

Disclaiming an opinion on the portion of the financial statements examined by the component auditors is not an appropriate reporting option as it implies that there may be issues with the work of the component auditors that the group auditor is unable to evaluate. If the component auditors' work did not identify any issues affecting the group auditors' report, then the group auditor can issue a standard (unmodified) report without referencing any involvement by the component auditors, or refer to their work and disclose the extent of their work in the group auditors' report. Identifying the component auditors by name and presenting their report along with the group auditors' report is also an option, but it may not be necessary or practical in all cases.

Which of the Following Is Not an Appropriate Reporting Option