Auditors will issue an adverse opinion when
A)a severe scope limitation has been imposed by the entity.
B)a violation of generally accepted accounting principles is sufficiently material and pervasive that a qualified opinion is not justified.
C)a qualified opinion cannot be rendered because the auditors lack independence.
D)the entity's ability to continue as a going concern is subject to substantial doubt.

Question

Quizplus · Accepted Answer

An adverse opinion is issued when there is a violation of generally accepted accounting principles that is sufficiently material and pervasive that a qualified opinion is not justified. A severe scope limitation would result in a disclaimer of opinion, lack of independence would result in a qualified opinion, and substantial doubt about the entity's ability to continue as a going concern would result in either a qualified opinion or an explanatory paragraph added to the opinion.

Auditors Will Issue an Adverse Opinion When