An auditor issues a modified audit opinion when the auditor _______.
A)concludes the financial statements are not presented fairly in accordance with the applicable financial reporting framework because of one or more material misstatements
B)concludes the financial statements are not presented fairly in accordance with the applicable financial reporting framework because of one or more immaterial misstatements
C)is able to gather sufficient appropriate audit evidence to draw a conclusion as to the fair presentation of the financial statements
D)is not able to gather sufficient appropriate audit evidence to draw a conclusion about the unfair presentation of the financial statements

Question

Quizplus · Accepted Answer

A modified audit opinion is issued when the auditor concludes that the financial statements are not presented fairly in accordance with the applicable financial reporting framework due to one or more material misstatements. Material misstatements are those that, in the auditor's professional judgment, could influence the economic decisions of users taken on the basis of the financial statements. Immateriel misstatements are not significant enough to cause such an effect. The other options do not meet the criteria for issuing a modified audit opinion.

An Auditor Issues a Modified Audit Opinion When the Auditor