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

What is the preferred action if the auditor finds the wording of the independent auditor's report unacceptable?

1. Withdraw from the engagement immediately.

2. Reword the form or attach a separate appropriate report.

3. Issue a qualified opinion stating the issues.

4. Continue with the report as is to maintain consistency.

The correct answer is: Reword the form or attach a separate appropriate report.

When an auditor finds the wording of the independent auditor's report unacceptable, the preferred action is to reword the form or attach a separate appropriate report. This approach allows the auditor to adhere to professional standards while ensuring that the report accurately reflects the findings and circumstances of the audit. Rewording the report or providing a supplementary report is crucial because the wording must comply with applicable auditing standards and accurately convey the auditor's opinion on the financial statements. By making the necessary adjustments, the auditor can maintain the integrity of the audit process and communicate any specific issues or concerns transparently to the users of the financial statements. This action is preferable to withdrawing from the engagement, which could be seen as abandoning the responsibilities of the auditor. Issuing a qualified opinion might not adequately address the issues related to the wording itself, as it primarily focuses on the opinion concerning the financial statements rather than the clarity of the report itself. Continuing with the report as it is could mislead users and undermine the auditor's credibility, as the wording may not reflect the auditor's opinion or the audit's findings accurately. Thus, rewording ensures that the report meets both professional standards and the expectations of stakeholders.