CAF-8 · Chapter 15 · Question 7 of 10
If management persistently refuses to correct multiple misstatements identified by the auditor, what is the auditor required to do before forming the final audit opinion?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Evaluate whether the uncorrected misstatements are material, individually or in aggregate, and modify the opinion if they exceed materiality.
Explanation
The auditor must accumulate uncorrected misstatements and assess their aggregate impact against the predetermined materiality threshold. If the total exceeds materiality and management still refuses to correct them, a qualified or adverse opinion is issued.
More Evaluation of Misstatements & Subsequent Events MCQs
- Q9If a written representation provided by management is directly contradicted by other reliable audit evidence gathered (e.g., management…
- Q10Management absolutely refuses to provide the fundamental written representation acknowledging their responsibility for preparing the…
- Q1A major customer of the client declares bankruptcy on 15 August, providing evidence that they were insolvent at the client's balance sheet…
- Q2On 20 July, a sudden, massive earthquake destroys the client's uninsured main factory. The client's year-end is 30 June. Assuming the…
- Q3During the period between the balance sheet date and the date the audit report is signed, what is the auditor's responsibility regarding…