When an adverse opinion is issued regarding internal control over financial reporting (ICFR), the auditor_______.
A)opines that the company has fairly reported its financial statements in accordance with Generally Accepted Accounting Principles (GAAP)
B)makes a clear statement that the company has not maintained effective internal control for the period under audit
C)makes a clear statement that the company has maintained effective internal control for the period under audit
D)is not entitled to receive full compensation for services rendered during the audit

Question

Quizplus · Accepted Answer

When an adverse opinion is issued regarding internal control over financial reporting, the auditor makes a clear statement that the company has not maintained effective internal control for the period under audit. This indicates that there are material weaknesses in the company's internal control that could affect the financial statements. It is important for stakeholders to be aware of this so that they can make informed decisions based on the company's financial statements.

When an Adverse Opinion Is Issued Regarding Internal Control Over