In an adverse or disclaimer of opinion report, the auditor:
A) believes that the effects are material.
B) believes that the effects are pervasive.
C) both A and B
D) none of the above

Question

Quizplus · Accepted Answer

In an adverse or disclaimer of opinion report, the auditor believes that the effects of the matter being reported are both material and pervasive. In adverse opinion, the auditor believes that the financial statements are materially misstated, that is, the information presented in the financial statements is not accurate, complete or reliable, and the auditor believes that the effect of the misstatement is so material or significant that it affects the overall fairness of the financial statements. Similarly, in the case of a disclaimer of opinion, the auditor is unable to express an opinion on the financial statements due to limitations on the scope of the audit or other reasons, but believes that the effects of the limitations are both material and pervasive. Therefore, both A and B are correct.

In an Adverse or Disclaimer of Opinion Report, the Auditor