Audit and Assurance Practice Exam

When can an auditor be required to adapt their audit opinion?

1. Whenever the client requests a change.

2. When there is a significant change in circumstances.

3. Only after the audit report has been issued.

4. Under no circumstances can opinions be changed.

The correct answer is: When there is a significant change in circumstances.

An auditor may need to adapt their audit opinion when there is a significant change in circumstances that could affect the financial statements or the information upon which the opinion was based. For instance, if subsequent events arise that reveal new information affecting the financial position of the entity after the audit report has been issued, the auditor may determine that the audit opinion requires modification to accurately reflect the current situation. This adaptation of the audit opinion ensures that users of the financial statements are provided with relevant and accurate information, maintaining the credibility and reliability of the audit process. Changes in circumstances could include significant legal developments, financial distress, or the discovery of fraud or error, all of which might necessitate a revision of the original audit opinion to maintain integrity in the reporting framework. In contrast, a client request alone does not justify a change in an audit opinion; it must be substantiated by circumstances affecting the statements themselves. Additionally, while adaptations might be considered after the report is issued, the original premise must still hold true unless a valid reason emerges that warrants modification. Therefore, the auditor's capacity to modify the opinion largely hinges on significant and relevant changes that impact the financial presentation.