specialist's findings result in a change to the auditor's report, such as a qualified opinion.
QUESTION: 23
An auditor most likely would express an unqualified opinion and would not add explanatory
language to the report if the auditor:

A. Wishes to emphasize that the entity had significant transactions with related parties.
B. Concurs with the entity's change in its method of computing depreciation.
C. Discovers that supplementary information required by FASB has been omitted.
D. Believes that there is a probable likelihood of a material loss resulting from an uncertainty
that is sufficiently supported and disclosed.

Answer(s): D
Explanation:
Choice "d" is correct. An auditor most likely would express an unqualified opinion and would not
add explanatory language to the report if the auditor believes that there is a probable likelihood
of a material loss resulting from an uncertainty that is sufficiently supported and disclosed.
Choice "a" is incorrect. Emphasis of a matter, such as the existence of significant transactions
with related parties, may result in an additional explanatory paragraph appended to an
otherwise unqualified opinion. Choice "b" is incorrect. A change in accounting principle does
result in an additional explanatory paragraph appended to an otherwise unqualified opinion.
Choice "c" is incorrect. Omission of supplemental information required by GAAP does result in
an additional explanatory paragraph appended to an otherwise unqualified opinion.
QUESTION: 24
An auditor would express an unqualified opinion with an explanatory paragraph added to the
auditor's report for:
A. Option A
B. Option B
C. Option C
D. Option D

Answer(s): D
Explanation:
Choice "d" is correct. An unjustified accounting change may cause the auditor to issue a
qualified or adverse opinion. A material weakness must be reported to management and those
charged with governance, but would not be disclosed in an explanatory paragraph appended to
an otherwise unqualified opinion. Choices "a", "b", and "c" are incorrect, as per the above
Explanation.
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