Green, CPA, was engaged to audit the financial statements of Essex Co. after its fiscal year had ended. The timing of Green's appointment and the start of fieldwork made confirmation of accounts receivable by direct communication with the customers not feasible. However, Green applied other procedures and was satisfied as to the reasonableness of the account balances. Green's auditors' report most likely contained a(n)
A)unqualified opinion.
B)unqualified opinion with an explanatory paragraph.
C)qualified opinion due to a scope limitation.
D)qualified opinion due to a departure from generally accepted auditing standards.

Question

Quizplus · Accepted Answer

Since Green was able to perform alternative procedures and was satisfied as to the reasonableness of the accounts receivable balance, an unqualified opinion can be issued. A scope limitation or departure from generally accepted auditing standards would require a qualified opinion. An explanatory paragraph would only be necessary if there were additional information to disclose.

Green, CPA, Was Engaged to Audit the Financial Statements of Essex