The auditor should disclaim an opinion under certain circumstances. In which one of the following situations would the auditor not be justified in disclaiming their opinion?
A) The auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive.
B) The auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be material but not pervasive.
C) It is not possible to form an opinion on the financial statements due to the potential interaction of the uncertainties and their possible cumulative effect on the financial statements.
D) The auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion.

Question

Quizplus · Accepted Answer

If the possible effects of undetected misstatements are material but not pervasive, the auditor would typically qualify the opinion rather than disclaim it.

The Auditor Should Disclaim an Opinion Under Certain Circumstances