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audit opinion

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › audit opinion

  • This topic has 10 replies, 3 voices, and was last updated 11 years ago by MikeLittle.
Viewing 11 posts - 1 through 11 (of 11 total)
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    Posts
  • May 23, 2014 at 6:11 pm #170357
    sadafabdul
    Member
    • Topics: 1
    • Replies: 9
    • ☆

    Hi,

    If in a scenario 2 uncorrected misstatements r individually immaterial n they appear material when added, wot opinion is appropriate? Adverse? But its material not pervasive! If qualified? Then in basis of qualified opinion para, r we goin to mention both issues? Hope i m clear with my question! Please guide me through this!

    May 24, 2014 at 9:17 am #170456
    rhythm
    Member
    • Topics: 12
    • Replies: 20
    • ☆

    i think a adverse opinion would be given if both misstatements are material and pervasive if not a qualified “except for” would be appropriate and yes both misstatements would be mentioned.

    i hope the answer is right, looking forward to see expert opinion of Acca tutors to check my answer

    thanks!

    May 24, 2014 at 11:44 pm #170572
    sadafabdul
    Member
    • Topics: 1
    • Replies: 9
    • ☆

    If both r individually immaterial, but when combined effect of both is taken, dey r material. I dont think we can refer them as pervasive just fr d fact dat “multiple elemnts r misstated”. N never heard ov mentioning 2 misstatements in “except for” opinion.
    Thnx fr ur answer anyways. Waiting for mike’s answer aswell!

    May 25, 2014 at 1:12 pm #170680
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23312
    • ☆☆☆☆☆

    Rhythm, please restrict your inputs to the general forum. Thanks 🙂

    Difficult to see the logic behind rhythm’s response! How can two immaterial mistakes lead to an adverse opinion?

    If, when combined, they become material then ask the directors to amend the financial statements. If they won’t, ask “Why?”

    If there’s no satisfactory explanation forthcoming, then consider wording of the report modification. Looks to me like it’s heading for an “except for” material not pervasive

    You’ve never heard of mentioning two misstatements within one “except for” report.

    I once saw a report that was qualified for a limitation of scope for the income statement, disagreement for the balance sheet and, in all other respects was properly presented in compliance with the Companies Act. And, after the opinion paragraph, there was an emphasis of matter.

    It’s totally possible to have a multi-qualified opinion that is still not pervasive

    May 25, 2014 at 1:25 pm #170682
    rhythm
    Member
    • Topics: 12
    • Replies: 20
    • ☆

    Sorry, mike i didn’t knew i can’t answer here as i am new here 🙂 .

    Anyways my response was that, If two not-material misstatements become Material when Combined then qualified “except for” opinion can be given. If two misstatements when combined become Material and Pervasive then adverse opinion can be given.

    I hope my understanding is right, if not please correct me mike.

    Thanks!

    May 25, 2014 at 3:29 pm #170720
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23312
    • ☆☆☆☆☆

    Rhythm, welcome to the site! There is a clue in the page title … “Ask the tutor”! Never mind, no harm done

    Now, going back to the original question from sadafabdul, he asked “If in a scenario 2 uncorrected misstatements r individually immaterial ……”

    It is difficult to imagine the combination of two immaterial misstatements, when aggregated, becoming a pervasive issue!

    (If two material misstatements, when aggregated, become pervasive then that would be grounds for an adverse opinion, but that is not answering the original post and could thus be misinterpreted!)

    May 25, 2014 at 5:00 pm #170764
    rhythm
    Member
    • Topics: 12
    • Replies: 20
    • ☆

    ok Thanks! 🙂

    May 25, 2014 at 7:09 pm #170797
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23312
    • ☆☆☆☆☆

    You’re welcome

    May 26, 2014 at 5:15 am #170857
    sadafabdul
    Member
    • Topics: 1
    • Replies: 9
    • ☆

    Thanks mike!

    May 26, 2014 at 6:41 pm #171022
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23312
    • ☆☆☆☆☆

    You’re welcome sadafabdul

    May 26, 2014 at 6:41 pm #171023
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23312
    • ☆☆☆☆☆

    You’re welcome sadafabdul

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