When single-year financial statements are presented, an auditor ordinarily would express an unmodified opinion with no emphasis of matter or other matter paragraph if the:
a. Prior year's financial statements were audited by another CPA whose report, which expressed an unmodified opinion, is not presented.
b. Auditor wishes to emphasize an accounting matter affecting the comparability of the financial statements with those of the prior year.
c. Auditor is unable to obtain audited financial statements supporting the entity's investment in a foreign affiliate.
d. Entity declines to present a statement of cash flows with its balance sheet and related statements of income and retained earnings.
Answer:A
Choice "a" is correct. Since only single-year financial statements are presented, the fact that another CPA audited the prior year's financial statements is not relevant. Therefore, the auditor would express an unmodified opinion.
Choice "c" is incorrect. The situation described would result in a qualified opinion or disclaimer of opinion due to a scope limitation.
Choice "d" is incorrect. The situation described would result in an qualified opinion due to inadequate disclosure.
Choice "b" is incorrect. The situation described would result in an unmodified opinion with an emphasis-of-matter paragraph added after the opinion paragraph.