It is appropriate to issue an opinion that contains the phrase 'because of the significance of the matter described in the Basis for Disclaimer of Opinion paragraph' when:
A) the auditor has not accumulated sufficient appropriate evidence to determine whether the financial report is presented fairly.
B) there has been a material misstatement on a particular matter that is material and pervasive.
C) there has been a material misstatement on a particular matter that is material.
D) none of the above

Question

Quizplus · Accepted Answer

The phrase "because of the significance of the matter described in the Basis for Disclaimer of Opinion paragraph" is typically included in an audit report when the auditor has not been able to obtain sufficient appropriate evidence to determine whether the financial report is presented fairly. This may result from limitations on the scope of the audit, such as when the auditor was unable to confirm certain account balances or transactions, or when there are significant uncertainties related to the entity's ability to continue as a going concern. In such cases, the auditor may issue a disclaimer of opinion stating that they are unable to form an opinion on the financial statements as a whole.

It Is Appropriate to Issue an Opinion That Contains the Phrase