An auditor should disclose the substantive reasons for expressing an adverse opinion in an explanatory paragraph:

Question

Quizplus · Accepted Answer

Choice "B" is correct. The auditor should disclose the substantive reasons for expressing an adverse opinion in a separate explanatory paragraph preceding the opinion paragraph. Choice "A" is incorrect. There are no circumstances where an explanatory paragraph precedes the scope paragraph. Choice "C" is incorrect. The explanatory paragraph follows the opinion paragraph when there is a change in accounting principle or when there is doubt as to going concern. Choice "D" is incorrect. The auditor cannot include an explanatory paragraph in the financial statements, which are the responsibility of management.

An Auditor Should Disclose the Substantive Reasons for Expressing an Adverse