When an Auditor Is Faced with a Material Departure from GAAP

question 32

Multiple Choice

When an auditor is faced with a material departure from GAAP that is pervasive,the audit report should contain

• A)an unqualified opinion.
• B)a qualified opinion with an explanatory paragraph.
• C)an adverse opinion.
• D)a disclaimer of opinion.

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Definitions:

Restitution

The act of compensating for loss, damage, or injury caused by one's actions, often as part of a legal judgment.

Specific Performance

A legal remedy requiring a party to fulfill their obligations as agreed in a contract, rather than paying damages.

Nonfraudulent Misrepresentation

An unintentional provision of false information that leads another to enter into a contract without the intent to deceive.

Out-of-Pocket Damages

Expenses or losses borne directly by an individual or entity due to another party's actions or inactions.