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What makes a material mistatement to be pervasive in nature resulting in an adverse opinion on disagreement ?. Is is the number of accounts that it effects or is it something to do with the significance of a balance in the FS for e.g PPE. Given an example that we have 120 properties and estimated useful life of each property is increased on avg with 10 years resulting in a material mistatement but also has a tendency to effect many accounts at the year end, is it pervasive ?
Thanks Mike.
It comes down to professionalism, experience, subjectivity, chic, dash, elan, skill
It’s down to the individual partner responsible for signing the audit report!
If that partner believes that the errors / misstatements are SO PERVASIVE that the financial statements are, as a result, MISLEADING, then an adverse opinion would be appropriate
What will cause financial statements to be misleading as in a way material mistatement will also mislead the financial statements giving a false view of an organization. what the term ‘misleading’ means in reference to FS ?
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