Which of the following circumstances generally results in the issuance of a report that includes an opinion that is other than unmodified?
A) The auditor is unable to obtain sufficient appropriate audit evidence.
B) The group auditors for the engagement are relying on the work of component auditors.
C) The financial statements are affected by a change in accounting principle due to a new FASB pronouncement.
D) The auditors have decided to emphasize the fact that the company has engaged in material amounts of related party transactions.

Question

Quizplus · Accepted Answer

If the auditor is unable to obtain sufficient appropriate audit evidence, they may issue a modified opinion to indicate the limitations of the audit and the potential impact on the financial statements.

Answer: B
 If the group auditors are relying on the work of component auditors, they may issue a modified opinion to indicate that the reliance on the work of others has impacted the scope of their audit.

Answer: C
 A change in accounting principle due to a new FASB pronouncement may require the issuance of a modified opinion to reflect the impact on the financial statements.

Answer: D
 Emphasizing material related party transactions does not necessarily result in a modified opinion, but it may be disclosed in the audit report as a key audit matter or other type of explanatory paragraph.

Which of the Following Circumstances Generally Results in the Issuance