If financial statements contain a material but non-pervasive departure from generally accepted accounting principles, the auditors should render a(n)
A)Qualified opinion with reference to departure.
B)adverse opinion with scope limitation reference.
C)adverse opinion with reference to departure.
D)disclaimer of opinion.

Question

Quizplus · Accepted Answer

A material but non-pervasive departure from generally accepted accounting principles would require the auditors to provide a qualified opinion with reference to the departure. This means that the financial statements are fairly presented overall, but there is a specific issue that needs to be disclosed to the users of the financial statements. An adverse opinion is given when the financial statements are not fairly presented overall, while a disclaimer of opinion is given when the auditors cannot obtain sufficient evidence to form an opinion. A scope limitation reference is given when the auditors were unable to perform certain audit procedures due to limitations outside of their control.

If Financial Statements Contain a Material but Non-Pervasive Departure from Generally