When financial statements contain a departure from GAAP, the auditors should explain the unusual circumstances in a separate paragraph and express an opinion that is
A)unqualified.
B)qualified.
C)adverse.
D)qualified or adverse, depending on the overall materiality and pervasiveness of the GAAP departure.

Question

Quizplus · Accepted Answer

The auditors should provide an explanation of the departure from GAAP in a separate paragraph and express an opinion that is either qualified or adverse depending on the overall materiality and pervasiveness of the GAAP departure. If the departure is material but not pervasive, a qualified opinion may be appropriate. If the departure is both material and pervasive, an adverse opinion may be necessary.

When Financial Statements Contain a Departure from GAAP, the Auditors