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

What is the primary focus of the auditor's report in the case of a qualified opinion?

1. Clear presentation of financial position.

2. Disclosure of the specific qualification nature.

3. Emphasis on management's responsibility.

4. Standard unmodified opinion format.

The correct answer is: Disclosure of the specific qualification nature.

The primary focus of the auditor's report in the case of a qualified opinion is the disclosure of the specific nature of the qualification. When an auditor issues a qualified opinion, it indicates that, except for certain areas identified, the financial statements present a true and fair view in accordance with the applicable financial reporting framework. The auditor must clearly describe the reasons for the qualification in the report, specifying the issues that have led to this opinion. This disclosure is crucial because it informs users of the financial statements about the limitations or issues that were found during the audit, helping them understand the context and implications of the opinion provided. In contrast, a clear presentation of financial position focuses more on the overall clarity and formatting of the financial statements rather than the specific issues addressed in a qualified opinion. Emphasis on management's responsibility pertains to the acknowledgement of management's role in preparing the financial statements, which is present in all audits, not specifically in the context of a qualified opinion. Lastly, a standard unmodified opinion format applies to situations where the financial statements are free from material misstatements, which is not the case with a qualified opinion. Thus, the emphasis on the specific qualification nature is essential to provide a meaningful understanding of the auditor's assessment of the financial statements.