The auditors conclude that an entity's illegal act,which has a material effect on the financial statements,has not been properly accounted for or disclosed.Depending on the overall materiality and pervasiveness of the effect of this illegal act on the financial statements,the auditors should express either a(n)
A) Adverse opinion or a disclaimer of opinion.
B) Qualified opinion or adverse opinion.
C) Disclaimer of opinion or an unqualified opinion with a separate explanatory paragraph.
D) Unqualified opinion with a separate explanatory paragraph or a qualified opinion.

Question

Quizplus · Accepted Answer

If an illegal act has a material effect on the financial statements and is not properly accounted for or disclosed, auditors should express a qualified opinion if the effect is material but not pervasive, or an adverse opinion if the effect is both material and pervasive.

The Auditors Conclude That an Entity's Illegal Act,which Has a Material