If financial statements contain a material but non-pervasive departure from generally accepted accounting principles,the auditors should render a(n)
A)Qualified opinion with reference to departure.
B)Adverse opinion with scope limitation reference.
C)Adverse opinion with reference to departure.
D)Disclaimer of opinion.

Question

Quizplus · Accepted Answer

A material but non-pervasive departure from generally accepted accounting principles leads to a qualified opinion. The auditors would specify the nature and extent of the departure in the audit report. Adverse opinions are given when the departure is significant and material to the financial statements as a whole. A disclaimer of opinion is issued when the auditors are unable to obtain sufficient evidence to form an opinion on the financial statements. A scope limitation reference is added when the auditors were not able to carry out certain audit procedures due to various reasons like restricted access to information.

If Financial Statements Contain a Material but Non-Pervasive Departure from Generally