If an audit firm accepts or continues to provide audits to a client firm with ineffective internal controls over financial reporting, the management representation letter will note that an adverse opinion will likely be issued.

Question

Quizplus · Accepted Answer

An adverse opinion is issued when the auditor, having obtained sufficient appropriate evidence, concludes that misstatements, individually or in the aggregate, are both material and pervasive to the financial statements. Ineffective internal controls over financial reporting do not automatically lead to an adverse opinion.

If an Audit Firm Accepts or Continues to Provide Audits