If the company fails to disclose related party transactions, what type of audit opinion should be issued?
Since U.S. GAAP requires a company to disclose every related party transaction (regardless of materiality), if the company doesn’t adequately disclose the transactions, then that represents a departure from GAAP.
If the issue is material and pervasive, then the audit team should issue an adverse opinion, but if the issue is only material, then a qualified opinion will likely be issued.
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What are the three types of modified opinions?
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What is qualified opinion?
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