An auditor was unable to obtain an audited financial report or other evidence supporting an entity's investment in a foreign subsidiary considered material to the financial report.Between which of the following opinions should the entity's auditor choose?
A)Qualified and disclaimer.
B)Qualified and adverse.
C)Disclaimer and unmodified with an Emphasis of Matter.
D)Adverse and unmodified with an Emphasis of Matter.

Question

Quizplus · Accepted Answer

If the auditor is unable to obtain evidence supporting a material investment in a foreign subsidiary, they cannot express an unmodified opinion. The auditor may choose to issue a qualified opinion if the financial statements are otherwise fairly presented, but there is a limitation on scope. If the auditor is unable to obtain sufficient evidence to form an opinion, they may issue a disclaimer of opinion. In this case, the auditor is unable to obtain audited financial reports or other evidence supporting the investment, making a disclaimer appropriate. However, if there are other issues with the financial statements, such as a misstatement or a violation of accounting principles, the auditor may also issue a qualified opinion. Therefore, the best choice is A) Qualified and disclaimer.

An Auditor Was Unable to Obtain an Audited Financial Report