Angel Pty Ltd's financial report includes two balance sheets and profit and loss accounts.One set is drawn up in accordance with applicable accounting standards, and the other set is drawn up without complying with one standard, which the directors consider to make the accounts misleading.The auditors concur.The audit report should, therefore, contain:
A) an adverse opinion.
B) a qualified opinion with an emphasis of matter section.
C) a disclaimer of opinion.
D) an unmodified opinion with an emphasis of matter section.

Question

Quizplus · Accepted Answer

An unmodified opinion with an emphasis of matter section is appropriate when the financial statements are prepared in accordance with applicable accounting standards, but there is a matter that needs to be emphasized. In this case, the directors and auditors believe that complying with one standard would make the accounts misleading, so they prepare an additional set of financial statements. The emphasis of matter section can be used to draw attention to this unusual situation while still issuing an unmodified opinion on the compliance with accounting standards.

Angel Pty Ltd's Financial Report Includes Two Balance Sheets and Profit