Under which of the following circumstances would an auditor's expression of an unqualified opinion be inappropriate?

Question

Quizplus · Accepted Answer

Choice "A" is correct. If the auditor is unable to obtain the audited financial statements of a significant subsidiary, a scope limitation exists. Assuming the effect is material, the auditor would issue either a qualified opinion or a disclaimer of opinion. Choice "B" is incorrect. Financial statements prepared on an entity's income tax basis are "other comprehensive basis of accounting" (OCBOA) financial statements. The auditor may issue a special report, which can include an unqualified opinion, on OCBOA financial statements. Choice "C" is incorrect. Significant deficiencies in the design and operation of an entity's internal control do not preclude issuance of an unqualified opinion, although they do increase the risk of material misstatement and will likely result in modifications to the nature, timing, and extent of the auditor's testing. Choice "D" is incorrect. An unqualified opinion may still be expressed when there are significant changes in year-end account balances as compared to prior year balances, as long as the auditor has obtained sufficient appropriate audit evidence about the current balances. Reports on Comparative Financial Statements

Under Which of the Following Circumstances Would an Auditor's Expression