Wednesday 20 September 2017

Cima F1 Exam Question No 59

Question No 59:

An external auditor has completed an audit and is satisfied that proper records have been maintained and that the financial statements reflect those transactions. However the auditor has one disagreement with the management of the entity. The disagreement involves the treatment of one large item of expenditure that has been classified by management as an increase in non-current assets. The auditor is of the opinion that the item should have been classified as maintenance and charged as an
expense to the statement of comprehensive income. The amount is material in the context of the reported profit for the year. Assuming that the management refuse to change their approach, which ONE of the following modified audit reports should the auditor use?


A. Emphasis of matter
B. “Except for” qualification
C. Adverse opinion
D. Disclaimer of opinion

Answer: B

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