Question

When the auditors of a nonpublic company are unable to comply with generally accepted auditing standards, they should issue an opinion that is unmodified, but include an additional emphasis-of-matter paragraph in the report.a) trueb) false

Answer 1

Answer:

The correct answer is B. False.

Explanation:

An unqualified or normal opinion is issued in the event that the auditor, after obtaining sufficient and competent audit evidence, is fully satisfied with the reasonableness of the financial statements and their preparation in accordance with generally accepted accounting principles and standards applied to a base consistent with previous years. This satisfaction of the auditors is presented in the report in a clear and affirmative manner.

In issuing an unqualified opinion, the auditor tacitly expresses that if there have been changes in accounting principles or in the method of application, the relative effects of these have been determined and correctly presented in the financial statements.