An Entity Is Being Sued for Substantial Damages for Producing

question 34

Multiple Choice

An entity is being sued for substantial damages for producing a faulty product. However, while the result of the litigation will not be known for some time, it believes that the claim is unjustified and that it will be successful in defending the action. It has included appropriate reference to the lawsuit in the financial report. What type of audit opinion should be issued?

• A) A qualified opinion.
• B) An adverse opinion.
• C) A disclaimer of opinion.
• D) An unmodified opinion with an Emphasis of Matter section.

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