When auditors lack independence, which of the following is true about the report on the entity's financial statements that should be issued?
A)The auditors should disclaim an opinion and should state specifically that they are not independent.
B)The auditors should disclaim an opinion but not mention that they are not independent.
C)The auditors should issue an unmodified opinion with an other-matter paragraph stating that they are not independent.
D)The auditors should issue a qualified opinion with an other-matter paragraph stating that they are not independent.

Question

Quizplus · Accepted Answer

When auditors lack independence, they cannot issue an unmodified, qualified, or adverse opinion on the financial statements. Instead, they should disclaim an opinion and specifically state that they are not independent. This is required to provide transparency and clarity to the users of the financial statements.

When Auditors Lack Independence, Which of the Following Is True