During the statutory audit of a company, the auditor identifies a material misstatement that management refuse

Question

During the statutory audit of a company, the auditor identifies a material misstatement that management refuses to correct despite obtaining sufficient appropriate audit evidence. According to SA 705 (Revised), which audit opinion is most appropriate if the misstatement is material but not pervasive?

Examoogle · Accepted Answer

The correct answer is Option A: Issue a qualified opinion because the identified misstatement is material but not pervasive. Practice and solve "During the statutory audit of a company, the auditor identifies a material misstatement that managem..." for Part 5 Domain Knowledge - CIL MT Company Secretary 2026. The correct answer is Option A: Issue a qualified opinion because the identified misstatement is material but not pervasive. Detailed step-by-step solution, conceptual clarity, and formulas on Examoogle.

Step-by-Step Solution & Concepts:
Practice and solve "During the statutory audit of a company, the auditor identifies a material misstatement that managem..." for Part 5 Domain Knowledge - CIL MT Company Secretary 2026. The correct answer is Option A: Issue a qualified opinion because the identified misstatement is material but not pervasive. Detailed step-by-step solution, conceptual clarity, and formulas on Examoogle.

Examoogle · Answer

Option B: Issue an adverse opinion because the financial statements contain a material misstatement

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Option C: Issue an unmodified opinion because sufficient appropriate audit evidence has been obtained

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Option D: Issue a disclaimer of opinion because management refused to revise the financial statements

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