Rachel, CPA, is conducting an audit of Eaton Enterprises, a nonissuer. Rachel has conducted her audit in accordance with generally accepted auditing standards, and she wishes to emphasize in her report that such standards do not require the same level of testing and reporting on internal control as is required for audits of issuers under the Sarbanes-Oxley Act. Which report modification would be most appropriate in this situation?

Question

Quizplus · Accepted Answer

Choice "A" is correct. The auditor may expand the scope paragraph to state that internal control was considered as a basis for designing appropriate audit procedures, but not for the purpose of expressing an opinion on the effectiveness of internal control. This serves to emphasize that the extended level of testing and reporting on internal control required by the Sarbanes-Oxley Act did not apply in this case. Choice "B" is incorrect. The auditor should modify the scope paragraph, not add an additional explanatory paragraph. Choice "C" is incorrect. An "except for" qualified opinion would not be appropriate in this case. Choice "D" is incorrect. Although a report modification is not required, the question states that Rachel wishes to emphasize the scope of her work on internal control. In such situations, the scope paragraph should be modified.

Rachel, CPA, Is Conducting an Audit of Eaton Enterprises, a Nonissuer