When issuing unqualified opinion, the auditor who evaluates the audit findings should be satisfied that the_____________?
Correct answer: B. Estimates of the total likely misstatement is less than materiality level
- A. Amount of known misstatement is documented in working papers
- B. Estimates of the total likely misstatement is less than materiality level
- C. Estimate of the total likely misstatement is more than materially level
- D. Estimates of the total likely misstatement cannot be made
Explanation
An unqualified opinion is appropriate only when the aggregate estimated misstatement, including known and projected errors, is below the materiality threshold. Merely documenting known errors is not enough if their total likely effect could be material.
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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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