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

What opinion should an auditor issue if supplementary information required by GASB is omitted?

1. A. Adverse opinion

2. B. Unmodified opinion

3. C. Qualified opinion with an emphasis-of-matter paragraph

4. D. Unmodified opinion with an other-matter paragraph

The correct answer is: D. Unmodified opinion with an other-matter paragraph

When supplementary information required by the Governmental Accounting Standards Board (GASB) is omitted from the financial statements, the auditor's response hinges on the significance of that omission. An unmodified opinion with an other-matter paragraph is appropriate because this type of opinion indicates that, except for the omitted information, the financial statements present a true and fair view of the entity's financial position and results of operations. The other-matter paragraph serves to draw attention to the supplementary information that has been omitted, providing clarity to users of the financial statements about the completeness of the information those statements present. This approach maintains the integrity of the auditor's unmodified opinion while also highlighting the importance of the omitted information for stakeholders' full understanding. In contrast, an adverse opinion would imply that the financial statements are materially misstated, which is not the case if only supplementary information is missing. A qualified opinion with an emphasis-of-matter paragraph would typically indicate that the financial statements are fair except for a particular issue but would be inappropriate here since the core financial statements are still reliable. Similarly, an unmodified opinion with an emphasis-of-matter paragraph is more suitable for highlighting specific uncertainties or issues rather than omissions in supplementary information. Thus, issuing an unmodified opinion with an