Which one of the following is an instance where the auditor would add a paragraph after the opinion paragraph?
A) There is serious doubt that the client can continue as a going concern.
B) Management's disclosures are not adequate.
C) There are significant uncertainties that are not properly disclosed in the footnotes.
D) There is a material dollar misstatement in the financial statements.

Question

Quizplus · Accepted Answer

If there is serious doubt that the client can continue as a going concern, the auditor would add an explanatory paragraph after the opinion paragraph expressing doubt about the entity's ability to continue as a going concern. This information is significant enough to require additional disclosure to users of the financial statements.

Answer: C 
 If there are significant uncertainties that are not properly disclosed in the footnotes, the auditor would add an explanatory paragraph after the opinion paragraph to inform users that there are material uncertainties that could affect their interpretation of the financial statements. This disclosure is necessary to ensure that users are aware of the risks associated with investing in the entity.

Answer: D 
 If there is a material dollar misstatement in the financial statements, the auditor would modify the opinion and add an explanatory paragraph after the opinion paragraph. This disclosure is necessary to inform users that the financial statements may not be reliable and that adjustments may be necessary to correct the misstatement.

Answer: B 
 If management's disclosures are not adequate, the auditor would discuss the matter with management and request additional disclosures to be included in the financial statements. If management refuses to provide the necessary disclosures, the auditor would consider modifying the opinion or adding an explanatory paragraph after the opinion paragraph to inform users that the disclosures are inadequate. However, simply adding an explanatory paragraph is not always necessary in this situation.

Which One of the Following Is an Instance Where the Auditor