When auditors conclude that a material and pervasive departure from GAAP exists in an entity's financial statements,which of the following phrases would most likely be included in their report?
A)"Do not present fairly in all material respects".
B)"Except for the effects of the departure from generally accepted accounting principles,as discussed in the preceding paragraph".
C)"We were engaged to audit the accompanying financial statements".
D)"As a result of the departures discussed in the following paragraph".

Question

Quizplus · Accepted Answer

The phrase "do not present fairly in all material respects" is typically included in the auditor's report when there is a material and pervasive departure from GAAP. This indicates that the financial statements are not reliable or accurate and may mislead users. Choices B, C, and D are standard phrases used in auditor's reports but do not specifically address material and pervasive departures from GAAP.

When Auditors Conclude That a Material and Pervasive Departure from GAAP