Which of the following phrases would auditors most likely include in their report when expressing a qualified opinion on the entity's financial statements because of inadequate disclosure?
A)"Subject to the departure from generally accepted accounting principles, as described below."
B)"Except for the effects of [XXX] as discussed in the Basis for Opinion section…"
C)"Except for the effects of [XXX] as discussed in the following paragraph…"
D)"Does not present fairly in all material respects."

Question

Which of the following phrases would auditors most likely include in their report when expressing a qualified opinion on the entity's financial statements because of inadequate disclosure?
A)"Subject to the departure from generally accepted accounting principles, as described below."
B)"Except for the effects of [XXX] as discussed in the Basis for Opinion section…"
C)"Except for the effects of [XXX] as discussed in the following paragraph…"
D)"Does not present fairly in all material respects."

Quizplus · Accepted Answer

The phrase "Except for the effects of [XXX] as discussed in the following paragraph…" indicates that the auditors have identified a material misstatement or omission in the financial statements due to inadequate disclosure. This phrase is commonly used in an auditor's report to express a qualified opinion when the effects of the inadequate disclosure are not pervasive to the financial statements as a whole.

Which of the Following Phrases Would Auditors Most Likely Include