When an auditor decides that adherence to IFRS would result in misleading financial statements, the auditor has no choice but to issue a qualified audit report.

Question

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An auditor may issue an "except for" opinion in a qualified report if there are departures from IFRS that are not pervasive. However, if adherence to IFRS would result in misleading financial statements, the auditor could consider the use of alternative accounting principles if they more fairly present the financial situation, potentially leading to an unqualified opinion if these principles are properly applied and disclosed.

When an Auditor Decides That Adherence to IFRS Would Result