Scenario: Evaluating the Auditor’s Report

Reading Passage

The auditor for MegaCorp found that the company failed to capitalize $5 million in equipment, instead expensing it. This misstatement is considered material but not pervasive to the financial statements as a whole. MegaCorp refuses to correct the error.
Question 1 of 5

What type of opinion should the auditor issue?

Question 2 of 5

Which paragraph would explain the $5 million error?

Question 3 of 5

If the error was so large it made the entire statements misleading, what opinion is used?

Question 4 of 5

What phrase is unique to a Qualified opinion?

Question 5 of 5

Does a Qualified opinion mean the auditor found fraud?

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