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NEW QUESTION: 1
When an auditor expresses an adverse opinion, the opinion paragraph should include:
A. The principal effects of the departure from generally accepted accounting principles.
B. The substantive reasons for the financial statements being misleading.
C. A description of the uncertainty or scope limitation that prevents an unqualified opinion.
D. A direct reference to a separate paragraph disclosing the basis for the opinion.
Answer: D
Explanation:
Explanation/Reference:
Explanation:
Choice "B" is correct. The opinion paragraph in an adverse opinion reads, "in our opinion, because of the
effects of the matters discussed in the preceding paragraphs, the financial statements...."
Choice "A" is incorrect. The principal effects of the departure from GAAP are included in the explanatory
paragraph, not the opinion paragraph.
Choice "C" is incorrect. The "substantive reasons for the financial statements being misleading" are
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Answer: A
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A. Option D
B. Option B
C. Option C
D. Option A
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