CPA · Question 06 · Area IV: Forming Conclusions and Reporting
An auditor is performing a review engagement under SSARS (AR-C 90) for a nonissuer. The auditor becomes aware of a material departure from the applicable financial reporting framework. Management refuses to correct the departure. The auditor determines that the departure is material but NOT pervasive. Which of the following is the MOST appropriate report modification?
Answer options:
Issue an adverse conclusion because the departure is material.
Issue a qualified conclusion and add a separate paragraph under the heading 'Known Departure from [Framework]' describing the matter.
Withdraw from the engagement as a review provides limited assurance and cannot accommodate known departures.
Issue an unmodified conclusion but add an Emphasis-of-Matter paragraph describing the departure.
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