The auditors do not believe that certain lease obligations have been reflected in conformity with generally accepted accounting principles in the client’s financial statements. What type of opinion should the auditors issue if they decide that the exceptions are immaterial? Material? Very material? Remember to complete all parts of the problems. Do not forget to show the necessary steps and explain how you attained that outcome.
Solution
since there is a departure from Generally accepted accounting principles , The auditor will issue a modified opinion.
1)since the auditor does not consider the effect to be material , Modification of opinion is not necessary.
2)since the auditor consider the effect to be material but not pervasive, He will issue a qualified opinion by including a basis of qualified opinion paragraph in his audit report.
3)since the auditor consider the effect to be material as well as pervasive , he will issue adverse opinion by including a basis of adverse opinion paragraph in his audit report.
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The auditors do not believe that certain lease obligations have been r.docx
1. The auditors do not believe that certain lease obligations have been reflected in conformity with
generally accepted accounting principles in the client’s financial statements. What type of
opinion should the auditors issue if they decide that the exceptions are immaterial? Material?
Very material? Remember to complete all parts of the problems. Do not forget to show the
necessary steps and explain how you attained that outcome.
Solution
since there is a departure from Generally accepted accounting principles , The auditor will issue
a modified opinion.
1)since the auditor does not consider the effect to be material , Modification of opinion is not
necessary.
2)since the auditor consider the effect to be material but not pervasive, He will issue a qualified
opinion by including a basis of qualified opinion paragraph in his audit report.
3)since the auditor consider the effect to be material as well as pervasive , he will issue adverse
opinion by including a basis of adverse opinion paragraph in his audit report.
