What does an unqualified auditor’s report indicate?

Question:

What does an unqualified auditor’s report indicate?

(a) The financial statements unfairly and inaccurately present the company’s financial position for the accounting period.

(b) The financial statements present fairly the financial position, the results of operations, and the changes in cash flows for the company.

(c) There are certain factors that might impair the firm’s ability to continue as a going concern.

(d) Certain managers within the firm are unqualified and, as such, are not fairly or adequately representing the interests of the shareholders.

Answer:

Unqualified auditors report:

An unqualified auditor’s report indicates the following points:-

• The financial statements prepared using the Generally Accepted Accounting Principles (GAAP) and are presented fairly.

• The financial statements comply with the statutory requirements and adequate disclosure of all the relevant material matter has been made.

• All material details are presented fairly in the financial statements. For example the financial position of the firm, the result of operations, and the cash flow for the current accounting period.

Hence, the most correct answer will be option (b)

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