It is appropriate to issue an opinion that contains the phrase 'except for' when:
A) there has been a material misstatement on a particular matter that is material and pervasive.
B) the auditor has not accumulated sufficient appropriate evidence to determine whether the financial report is presented fairly.
C) there has been a material misstatement on a particular matter that is material.
D) none of the above

Question

Quizplus · Accepted Answer

The phrase 'except for' is used when there is a material misstatement on a particular matter that is material. This means that the financial report is presented fairly except for the material misstatement. The misstatement may not be pervasive, meaning it does not affect the entirety of the financial statements, but it is still significant enough to require disclosure. Therefore, option C is the most appropriate. Option A includes the additional condition that the misstatement is also pervasive, which is not necessary for the use of 'except for'. Option B refers to situations where the auditor cannot form an opinion due to lack of evidence, which is not relevant to the use of 'except for'. Option D is incorrect as there is a situation where the use of 'except for' is appropriate.

It Is Appropriate to Issue an Opinion That Contains the Phrase