Question 3 - Part b

In this lesson

1. 0:00 Audit opinion when management refuses adjustments
2. 0:42 Identifying material misstatements and non-compliance
3. 2:16 Assessing whether misstatements are pervasive
4. 4:38 Determining qualified opinion and basis paragraph
5. 6:36 Structuring your answer for full marks
6. 7:50 Professional marks for justified judgement

About this lesson

You'll discover why treating multiple misstatements as a combined impact is essential, and how to structure your answer to capture all available marks. The video walks you through a practical four-mark question where two material misstatements remain unresolved: non-disclosure of related party transactions and an overstatement of profit. The key technique is assessing whether these issues are pervasive across the financial statements, then using that judgment to determine whether the opinion should be qualified. You'll learn the exact steps to follow: identify the misstatements and confirm they're material, evaluate whether they're pervasive, conclude on the appropriate opinion (in this case, a qualified opinion), and explain what would appear in the basis of qualified opinion paragraph. The lesson emphasises a critical exam technique: never give separate opinions for each misstatement. There is only one audit opinion in any audit report, regardless of how many issues exist. By working through this structured approach and justifying your reasoning at each step, you'll earn both technical marks for content and professional marks for demonstrating sound auditor judgment. This methodology applies to any audit opinion question you'll encounter in the exam.

Duration: 9m