When auditors conclude that a material and pervasive departure from GAAP exists in an entity's financial statements, which of the following phrases would most likely be included in their report?
A)"Do not present fairly."
B)"Except for the effects of the matter described in the Basis for Opinion section of our report…"
C)"We were engaged to audit the accompanying financial statements."
D)"As a result of the departures discussed in the Opinion on the Financial Statements section of our report…"

Question

Quizplus · Accepted Answer

The phrase "do not present fairly" is typically used in an auditor's report when there is a material and pervasive departure from GAAP in the entity's financial statements. This phrase indicates that the financial statements are materially misstated and should not be relied upon by users of the financial statements.

When Auditors Conclude That a Material and Pervasive Departure from GAAP