Question: Which audit opinion (audit report) would be the most appropriate in the following case? Four weeks after the year-end date, a major customer of Delta

Which audit opinion (audit report) would be the most appropriate in the following case?

Four weeks after the year-end date, a major customer of Delta Farm Inc. declared bankruptcy. Because the customer had confirmed the balance due to Delta at the balance sheet date, management refuses to write off the account and disclose the information. The receivable represents approximately 10% of accounts receivable, 20% of net earnings before taxes and could materially impact the value of inventory since the customer maintained a large value of inventory on consignment. You decide that this could have a material and pervasive affect on the financial statements.

options:

Unmodified/Unqualified with an emphasis of matter paragraph

Modified/Qualified - Scope restriction

Unmodified/Unqualified

Adverse

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