Auditors will issue an adverse opinion when
A)A severe scope limitation has been imposed by the entity.
B)A violation of generally accepted accounting principles is sufficiently material and pervasive that a qualified opinion is not justified.
C)A qualified opinion cannot be rendered because the auditors lack independence.
D)The entity's ability to continue as a going concern is subject to substantial doubt.

Question

Quizplus · Accepted Answer

An adverse opinion is issued when there is a violation of generally accepted accounting principles that is sufficiently material and pervasive that a qualified opinion is not justified. A qualified opinion is issued when there is a limitation in scope, lack of independence, or a departure from GAAP that is not pervasive. When there is substantial doubt about the entity's ability to continue as a going concern, a disclaimer of opinion is issued.

Auditors Will Issue an Adverse Opinion When