Violation of generally accepted principles of auditing
Violation of accounting principles
Lack of adequate information and explanations
All of the above
Answer is Wrong!
Answer is Right!
The correct answer is D. All of the above.
A qualified audit report is issued when the auditor has a significant concern about the fairness of the financial statements, but is not so concerned that the financial statements are materially misstated. The auditor may issue a qualified report for a variety of reasons, including:
- Violation of generally accepted auditing principles (GAAS). GAAS are the standards that auditors follow when conducting an audit. If the auditor believes that the company has not complied with GAAS, they may issue a qualified report.
- Violation of generally accepted accounting principles (GAAP). GAAP are the standards that companies follow when preparing their financial statements. If the auditor believes that the company has not complied with GAAP, they may issue a qualified report.
- Lack of adequate information and explanations. The auditor may issue a qualified report if they believe that the company has not provided enough information in the financial statements or the accompanying notes.
A qualified audit report is a serious matter, and it is important to understand the reasons why it may be issued. If you have any questions about a qualified audit report, you should contact your auditor or an accountant.