Which of the following is a proper description of an auditor report?
A)Unqualified opinion: identifies certain exceptions to the clean opinion
B)Adverse opinion: notes that there are material misstatements presented
C)Qualified opinion: states that the auditors believe the financial statements are fairly and consistently presented in accordance with GAAP
D)Unqualified opinion: states that the auditors were not able to reach a conclusion

Question

Quizplus · Accepted Answer

An adverse opinion is given when the auditor believes there are material misstatements in the financial statements that are so pervasive that they affect the overall fairness of the financial statements. An unqualified opinion is given when the auditor believes the financial statements are fairly and consistently presented in accordance with GAAP. A qualified opinion is given when the auditor believes the financial statements are fairly presented in accordance with GAAP except for a specific portion of the financial statements. An auditor report stating that they were not able to reach a conclusion would be considered a disclaimer of opinion. Therefore, the proper description of an auditor report in this scenario is an adverse opinion, which notes that there are material misstatements presented.

Which of the Following Is a Proper Description of an Auditor