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Exam Code: 1Z0-1043-21

Exam Name: Oracle Cloud Platform Application Development 2021 Specialist

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NEW QUESTION: 1
In which of the following situations would an auditor ordinarily choose between expressing an "except for"
qualified opinion or an adverse opinion?
A. The financial statements fail to disclose information that is required by generally accepted accounting
principles.
B. The auditor is asked to report only on the entity's balance sheet and not on the other basic financial
statements.
C. The auditor did not observe the entity's physical inventory and is unable to become satisfied as to its
balance by other auditing procedures.
D. Events disclosed in the financial statements cause the auditor to have substantial doubt about the
entity's ability to continue as a going concern.
Answer: A
Explanation:
Explanation/Reference:
Explanation:
Choice "B" is correct. Failure to disclose information that is required by GAAP is a departure from GAAP.
Departures from GAAP result in a qualified or an adverse opinion.
Choice "A" is incorrect. If the auditor is unable to observe physical inventory and is unable to become
satisfied through alternative means, that is a scope limitation. Scope limitations result in either a qualified
opinion or a disclaimer of opinion.
Choice "C" is incorrect. The auditor can report on one financial statement and not the others. This does not
preclude issuance of an unqualified opinion.
Choice "D" is incorrect. If, after considering identified conditions and events and management's plans, the
auditor concludes that substantial doubt about the entity's ability to continue as a going concern for a
reasonable period of time remains, the audit report should include an explanatory paragraph (after the
opinion paragraph in the unqualified report) to reflect that conclusion.


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