When a material uncertainty exists,the auditor must
A)disclose it in the audit report.
B)first determine the materiality of the item and whether adequate disclosure is included in the financial statements.
C)issue a disclaimer of opinion.
D)issue a modified opinion.

Question

Quizplus · Accepted Answer

The auditor must first determine the materiality of the item and evaluate whether adequate disclosure is included in the financial statements before deciding whether to disclose the uncertainty in the audit report or modify the opinion. A disclaimer of opinion should only be issued when the auditor is unable to obtain sufficient appropriate audit evidence, which may not be applicable in this scenario.

When a Material Uncertainty Exists,the Auditor Must