Your audit client has not written inventory down to net realisable value in accordance with approved accounting standards. The write-down would reduce current assets by 15 per cent and net profit before income tax by
11 per cent. What type of auditor's report should you issue?
A) An unmodified opinion with an Emphasis of Matter paragraph.
B) A disclaimer of opinion.
C) An adverse opinion.
D) A qualified opinion.

Question

Quizplus · Accepted Answer

The write-down of inventory to net realisable value is a material misstatement that affects the financial statements. Therefore, the auditor should issue a qualified opinion.

Your Audit Client Has Not Written Inventory Down to Net