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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!
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!
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!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
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!
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!)
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