During the year under audit, Forrest Corporation experienced significant losses due to a pervasive fraud scheme. Because of the lack of documentary evidence and inability to perform appropriate auditing procedures, the auditors were unable to determine the total amount of the loss. What type of report should the auditors issue?
A)Qualified or adverse opinion.
B)Disclaimer or adverse opinion.
C)Disclaimer of opinion or qualified opinion.
D)Unmodified opinion with an other-matter paragraph.

Question

Quizplus · Accepted Answer

When auditors cannot obtain sufficient appropriate audit evidence about a significant matter due to an event or condition, and the possible effects on the financial statements could be both material and pervasive, they may issue a disclaimer of opinion or a qualified opinion, depending on the extent of the information missing and its impact on the ability to form an opinion on the financial statements as a whole.

During the Year Under Audit, Forrest Corporation Experienced Significant Losses