An auditor has been unable to obtain the audited financial report for the entity's major foreign subsidiary due to civil unrest in that country.The appropriate auditor's report is:
A)an unmodified opinion on the consolidated accounts but a qualified opinion on the parent company's accounts.
B)an unmodified opinion with an Emphasis of Matter paragraph.
C)a qualified opinion or a disclaimer of opinion.
D)a qualified opinion or an adverse opinion.

Question

Quizplus · Accepted Answer

The inability to obtain audited financial reports for a subsidiary would result in a lack of sufficient evidence for the auditor to express an unqualified opinion on the consolidated accounts. As a result, the appropriate auditor's report would either be a qualified opinion or a disclaimer of opinion, depending on the materiality of the subsidiary. An emphasis of matter paragraph would not be sufficient in this case because it does not address the lack of audited financial reports for a major subsidiary. A qualified opinion on the parent company's accounts would be incorrect because the issue relates to the subsidiary, not the parent company. An adverse opinion would only be appropriate if the financial statements were materially misstated, which is not necessarily the case here.

An Auditor Has Been Unable to Obtain the Audited Financial