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1.) distinguish between a qualified opinion an adverse opinion and a disclaimer of opinion and explain the circumstances under which each is appropriate.
2.) define materiality as ite is used in audit reporting. what conditions will affect the auditor's determination of materiality.
3.) explain how materiality differs for failure to follow approved accounting standards and disagreements.
subject : audit and assurance
1.A qualified opinion: the auditor found the financial reports essentially in conformance with Generally Accepted Accounting Principles, except for one or a few areas where the auditor cannot, or does not want to, assert conformance.
2. An adverse opinion: the auditor has concluded that the audited financial statements do not fairly represent the organization's financial position or financial performance, and that there are significant departures from GAAP.
3. Disclaimer of opinion: The auditor may issue a disclaimer of opinion, that is, publicly report that the auditor has chosen not to issue an opinion. This may occur when Auditors decide they cannot be impartial or independent regarding the company or organization audited.
The main difference is that:
A qualified opinion is given when there are maybe one or two misstatements in the accounts but which are not pervasive (for instance inadequate disclosures in the footnotes to the financial statement).
An Adverse opinion is given when the financial statement does not give a true and fair view of the financial position of the company. Adverse opinion is issued when there is a misstatement that is pervasive.
A Disclaimer of opinion is when an auditor is unable to reach a conlusion on the audited financial statements, maybe due to lack of substantial eveidence and so does not issue an opinion.
I am fully agree with Mr Wilfredo .Thank you
Thanks for inviting
thanks for invitation
A qualified opinion means the financial reports essentially in conformance with Generally Accepted Accounting Principles
An adverse opinion means the audited financial statements do not fairly represent the organization's financial position
disclaimer of opinion means the auditor has chosen not to issue an opinion