Assume you are the partner in charge of the 2012 audit of Bashir Corporation, a private company. The audit report has not yet been prepared. In each independent situation following, indicate the appropriate action to be taken.
-One week before you complete auditing procedures in the field, you discover that the audit manager on the Bashir engagement owns a material amount of Bashir's common stock.
A) Issue a standard unmodified audit report.
B) Issue an qualified report in the form of a qualification of both the scope and opinion.
C) Issue an qualified report in the form of a qualification of the opinion only.
D) Issue an unmodified opinion with an emphasis of a matter paragraph.
E) Issue an unmodified opinion with modified wording.
F) Issue an adverse opinion.
G) Disclaim an opinion.

Question

Quizplus · Accepted Answer

The audit manager's ownership of a material amount of the client's stock represents a significant independence impairment. This situation compromises the audit's objectivity, leading to the necessity of disclaiming an opinion due to the inability to assure independence in the audit process.

Assume You Are the Partner in Charge of the 2012