When the financial statements contain a material departure from GAAP that the auditor believes is justified, where should the justification appear?
A) In a footnote.
B) In a paragraph added before the scope paragraph.
C) In the opening paragraph.
D) In a paragraph added before the opinion paragraph.

Question

Quizplus · Accepted Answer

The justification for a material departure from GAAP that the auditor believes is justified should appear in a paragraph added before the opinion paragraph to clearly explain the reason for the departure and its impact on the financial statements.

When the Financial Statements Contain a Material Departure from GAAP