Andrews Corporation adopted an accounting principle that is a material departure from GAAP.The auditor determined that the financial statements are fairly presented,except for this specifically identifiable GAAP departure,and therefore would issue a disclaimer of opinion.

Question

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The auditor would likely issue a qualified opinion or an adverse opinion, not a disclaimer of opinion, because the departure from GAAP is specifically identifiable and the rest of the financial statements are fairly presented. A disclaimer of opinion is issued when the auditor cannot obtain sufficient appropriate audit evidence on which to base the opinion.

Andrews Corporation Adopted an Accounting Principle That Is a Material