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ACCA Strategic Professional · Advanced Audit and Assurance (International) · Reporting on other assignments

Delta Partners is engaged to give assurance on a client's published carbon emissions report. In the course of the work, the practitioner concludes that a material misstatement exists in the subject matter information, and management refuses to correct it. The engagement is a reasonable assurance engagement and the effect is material but not pervasive. What is the appropriate form of conclusion?

A qualified conclusion is appropriate, stating that except for the effect of the identified misstatement the information is fairly stated. The misstatement is material but not pervasive, so an adverse conclusion is not needed, and a disclaimer relates to scope limitations rather than known misstatements.

  1. AAn unmodified conclusion with an emphasis of matter paragraph
  2. BA qualified conclusion, stating that except for the effect of the matter the information is fairly statedCorrect
  3. CA disclaimer of conclusion due to lack of evidence
  4. DAn adverse conclusion because management refused to correct it

Explanation

Where a material misstatement exists that is not pervasive, a qualified conclusion is appropriate. An adverse conclusion is for pervasive misstatements, and a disclaimer is for limitation of scope. Emphasis of matter cannot cure a known material misstatement.

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