Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

An auditor issues a qualified opinion due to inadequacies in an entity's computerized accounting system. What should the opinion paragraph indicate?

1. A departure from generally accepted auditing standards

2. The possible effects on financial statements

3. Inadequate disclosure

4. A client-imposed scope restriction

The correct answer is: The possible effects on financial statements

When an auditor issues a qualified opinion, it generally reflects that there are certain issues that, while significant, do not affect the overall fairness of the financial statements in a substantial way. In the context of inadequacies in a computerized accounting system, the opinion paragraph must address the possible effects of these inadequacies on the financial statements. Indicating the potential impacts allows users of the financial statements to understand the significance of the issue and how it may affect their decisions or understanding of the company's financial position. This communication is crucial as it maintains transparency regarding the auditor's findings, explaining that while the financial statements are mostly reliable, there are specific areas where the reliability might be compromised due to the identified inadequacies in the accounting system. The other options do not directly address the requirement of providing insight into the impact of the identified issues on the financial statements. Focusing on the possible effects ensures that stakeholders are adequately informed regarding the implications of the auditor's findings, which is a core aspect of an auditor's responsibility in issuing a qualified opinion.