Question
The accounting firm of Jovanovic and St. Pierre has discovered, during its audit of Robson Chemicals Inc., that the client is being sued for $3
The accounting firm of Jovanovic and St. Pierre has discovered, during its audit of Robson Chemicals Inc., that the client is being sued for $3 million. Allegedly, one of its products exploded and severely injured a customer. In the firms discussion with Robsons lawyers, Jovanovic and St. Pierre ascertained that it is very likely that Robson will indeed have to pay this entire amount when the lawsuit is resolved. To provide for this, Robsons chief financial officer has included information relating to the lawsuit in the notes to its financial statements but did not otherwise reflect it in its financial statements. What types of audit opinion could be issued? Please give reasoning. Multiple answers are possible. 1-Unqualified report
2-Unqualified with emphasis of matter paragraph regarding the lawsuit
3-Qualified report due to a scope limitation
4-Qualified report due to a GAAP departure
5-Adverse opinion
6-Denial of opinion
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started