Audit Reports

In auditing the long-term investments account, Levine, CPA, is unable to obtain audited financial statements for an investee located in a foreign country.  Levine concludes sufficient appropriate audit evidence regarding this investment cannot be obtained.

For each of the situations listed below, identify the appropriate opinion type and report modification by double-clicking on the shaded cells and selecting from the options provided.

Opinion Type    Introductory Paragraph     Scope Paragraph     Opinion Paragraph   Explanatory Paragraph

Situation:
1.  Assume the potential effect on the financial statements is immaterial
2.  Assume the potential effect on the financial statements is moderate.
3.  Assume the potential effect on the financial statements is high.

1.   Unqualified | No change | No change | No change | None required

Since the potential effect on the financial statements is immaterial, no change to the standard unqualified opinion is required.

2.   "Except for" qualified | No change | Modify | Modify | Insert preceding opinion

A scope limitation that has a material effect on the financial statements results in a qualified opinion.

3.   Disclaimer | Modify | Omit | Modify | Insert preceding opinion

A scope limitation that has a very material effect on the financial statements results in a disclaimer of opinion.