An auditor should generally issue a qualified opinion when a material misstatement or limitation is:
Correct answer: A. Material but not pervasive
- A. Material but not pervasive
- B. Immaterial and isolated
- C. Pervasive and fundamental
- D. Limited only to cash transactions
Explanation
A qualified opinion is appropriate when the matter is material but does not affect the financial statements pervasively. A pervasive misstatement may require an adverse opinion, while a pervasive scope limitation may require a disclaimer.
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About Auditing
Auditing examines accounting records and financial statements to determine whether they present a reliable and fairly stated position. The subject covers audit objectives, internal controls, audit evidence, materiality, vouching, verification, working papers, auditor independence, audit reports, and the distinction between an audit and accounting or investigation.
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