Higgins Insurance Ltd is trading profitably at 30 June 20X0 as reflected in its financial report.On 24 July 20X0 there is a hailstorm in Sydney that creates unprecedented damage.Although Higgins had undertaken all the normal reinsurance processes, it is unlikely that they will be able to pay all claims and there is a high probability that the company will have to be wound up.The auditor believes that the financial report as at 30 June 20X0 is true and fair and that this natural disaster is adequately disclosed.The auditor should issue:

Question

Quizplus · Accepted Answer

The auditor should issue an adverse opinion because the financial report is not true and fair due to the material misstatement caused by the natural disaster.

Higgins Insurance Ltd Is Trading Profitably at 30 June 20X0