When the entity fails to include information that is necessary for the fair presentation of financial statements in the body of the statements or in the related footnotes, it is the responsibility of the auditor to present the nature and impact of the faulty accounting or misstatement in the auditor's report and express a(n):
A)qualified opinion or a disclaimer of opinion.
B)qualified opinion or an adverse opinion.
C)adverse opinion or a disclaimer of opinion.
D)qualified opinion or an unqualified opinion.

Question

Quizplus · Accepted Answer

When an entity omits information necessary for fair presentation, the auditor may issue a qualified opinion if the misstatement is material but not pervasive. If the omission is both material and pervasive, an adverse opinion is appropriate. This reflects the auditor's judgment on the financial statements' overall fairness.

When the Entity Fails to Include Information That Is Necessary