1. The primary reason for issuing an adverse audit opinion is that the client's financial statements contain a pervasive and material unjustified departure from GAAP.
2. An adverse opinion would contain language indicating that the financial statements are not presented fairly in accordance with GAAP.
3. If the auditor issues a disclaimer because of a scope limitation, the scope paragraph of the report is moved to the beginning of the report.
4. When the auditor issues a disclaimer because of a lack of independence, the audit report should state the lack of independence, and describe the reasons for the lack of independence.
5. When the financial statements contain a justified departure from GAAP, the auditor can choose between an unqualified and qualified opinion.
6. If the auditor lacks independence, the auditor can choose between an adverse opinion and a disclaimer of opinion.
7. The auditor issues an adverse opinion on ICFR if the client has one or more significant deficiencies in ICFR.
8. If there are restrictions placed on the scope of the engagement being conducted for purposes of issuing an opinion on ICFR, the auditor either withdraws from the engagement or disclaims an opinion.

  • CreatedSeptember 22, 2014
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