Qualified for Misstatement

Question 1

When would you issued a qualified opinion?

Answer 1

1) Presentation F/S are materially misstated (not pervasive)
2) Scope limitation that is material (not pervasive)

Question 2

What are the changes to the audit report for a qualified opinion?

Answer 2

1) Introduction: No effects
2) Auditor Responsibility: Modify last sentence to include the word “qualified”
3) Add “Basis for Qualified Opinion” paragraph
4) Opinion Paragraph: State “In our opinion, EXCEPT FOR THE EFFECTS OF THE MATTER DESCRIBED IN THE BASIS FOR QUALIFIED OPINION PARAGRAPH….”

Question 3

What are the three types of modified opinions?

Answer 3

1) Qualified
2) Adverse
3) Disclaimer of opinion