A PA finds that the client has not capitalized a material amount of leases in the financial statements.When considering the materiality of this departure from IFRS,the PA's reporting options are
A)qualified or adverse opinion.
B)unmodified or disclaimer of opinion.
C)unmodified or qualified opinion.
D)unmodified opinion with an Emphasis of Matter paragraph.

Question

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The fact that the client has not capitalized a material amount of leases goes against IFRS, which means that there is a departure from the accounting framework. This departure is material, which means that it is likely to have a significant impact on the financial statements. As such, the PA's reporting options are limited to either a qualified or adverse opinion. A qualified opinion would be appropriate if the PA believes that the departure is material but not pervasive. An adverse opinion would be appropriate if the PA believes that the departure is both material and pervasive.

A PA Finds That the Client Has Not Capitalized a Material