If financial statements contain a very material departure from GAAP such that the financial statements are virtually useless,the auditor can render a(an)________.
A)qualified "except for" opinion with reference to the departure
B)adverse opinion with scope limitation reference
C)adverse opinion with reference to the departure
D)disclaimer of opinion

Question

Quizplus · Accepted Answer

If financial statements contain a very material departure from GAAP such that the financial statements are virtually useless, the auditor can render an adverse opinion with reference to the departure. This means that the auditor believes the financial statements are materially misstated and, therefore, cannot be relied upon by users. A disclaimer of opinion would only be issued if the auditor was unable to obtain sufficient evidence to form an opinion, which is not the case here. A qualified "except for" opinion and an adverse opinion with scope limitation reference would also not be appropriate in this situation.

If Financial Statements Contain a Very Material Departure from GAAP