Types of Audit Opinions A CPA, engaged in the audit of financial statements of a large manufacturer with branch offices that are widely dispersed, is not able to count the substantial undeposited cash receipts at the close of business on the last day of
the fiscal year at all branches. As an alternative to this procedure to verify the accurate cutoff of cash receipts, the CPA observes that deposits in transit as shown on the year-end bank reconciliation appeared as credits on the bank statement on the first business day of the New Year. Based on this, the auditor was satisfied as to the cutoff of cash receipts. REQUIRED: Which type of audit report would you suggest be issued this year and why?
Because the auditor was able to obtain alternative evidence, no scope qualification is necessary. If there were such a qualification, it would be a qualified scope and opinion or a disclaimer, depending on materiality. However, in this case, it appears as if an unqualified opinion with standard wording is most likely.
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