If the preparers of the financial report believe that the application of an accounting standard may mislead the users of those statements, and the auditor concurs with this view:
A) a scope limitation will arise.
B) a standard unmodified opinion can be issued.
C) the accounting standard need not be followed.
D) an emphasis of matter paragraph will be added to the audit report.

Question

Quizplus · Accepted Answer

If both the preparers and the auditor believe that the application of an accounting standard may mislead the users of the financial statements, an emphasis of matter paragraph will be added to the audit report to highlight the issue and provide additional information to the users. This does not affect the overall opinion, which will be standard and unmodified.

If the Preparers of the Financial Report Believe That the Application