Juan Donald, an independent auditor, was engaged to perform an audit of the financial report of Pinnacle Ltd one month after its financial year had ended.Although the inventory count was not observed by Donald and accounts receivable were not confirmed by direct communication with debtors, Donald was able to gain satisfaction by applying alternative auditing procedures.Donald's auditor's report will probably contain:
A)an unmodified opinion and an Emphasis of Matter paragraph.
B)a qualified opinion.
C)an unmodified opinion.
D)either a qualified opinion or a disclaimer of opinion.

Question

Quizplus · Accepted Answer

Donald was able to gain satisfaction by applying alternative auditing procedures, therefore he may still issue an unmodified opinion. Not observing the inventory count and not confirming accounts receivable by direct communication with debtors may not have a significant impact on the overall financial statements as a whole. Therefore, an unmodified opinion is still possible.

Juan Donald, an Independent Auditor, Was Engaged to Perform an Audit