Modifying the audit report is necessary when the auditor
A)concludes that the financial statements are not free from material misstatement
B)suspects that the financial statements are not free from material misstatement
C)is unable to obtain sufficient appropriate evidence to conclude that the financial statements are materially misstated
D)is unable to obtain sufficient appropriate evidence to conclude that the financial statements are free from material misstatement
E)obtains sufficient appropriate evidence to conclude that the financial statements are free from material misstatement
F)both A and B
G)both A and D
H)both C and E

Question

Quizplus · Accepted Answer

Modifying the audit report is necessary when the auditor is unable to obtain sufficient appropriate evidence to conclude that the financial statements are free from material misstatement (option D). This means that the auditor could not provide an unqualified opinion, and a modification in the form of a qualified opinion, adverse opinion, or disclaimer of opinion may be necessary. On the other hand, options A and B refer to situations where the financial statements are not free from material misstatement, which also requires a modification in the form of a qualified opinion, adverse opinion, or disclaimer of opinion. Option C and option E do not require a modification, as the auditor was able to form an opinion about the financial statements. Option F is incorrect, as option B is already covered under option A. Therefore, the best choice is G, which covers the only scenario where a modification in the audit report is necessary.

Modifying the Audit Report Is Necessary When the Auditor