[Anonymous]

“When the auditor is unable to satisfy himself regarding the opening amount of inventory, he or she must disclaim on opinion on the Income Statement because of the inability to verify the COGS for the year. The auditor may, however, issue an unmodified opinion on the Balance Sheet, since inventory can be verified on the balance sheet date.”

The above was an explanation from a 2013 question from Becker. I thought that you weren’t allowed to issue piecemeal opinions? Can someone explain this? Or am I missing what a piecemeal opinion is? I thought that you couldn’t issue different opinions on separate financial statements. Please explain!!

[Iron_Victory]

You are not allowed to issue a piecemeal opinion and say something to the extent of “accounts X, Y and Z are in conformity with gaap but accounts a,b,c are not in conformity with gaap”

This is a scope limitation because we have no way satisfy ourselves with regard to beginning inventory and as such our COGS figures. The balance sheet should be fine if we are satisfied with ending inventory. So we disclaim an opinion on the Income statement and the related statement of cash flows.

AUD - (74),78
BEC - 85
FAR - 86
REG - 84

[Iron_Victory]

You are not allowed to issue a piecemeal opinion and say something to the extent of “accounts X, Y and Z are in conformity with gaap but accounts a,b,c are not in conformity with gaap”

This is a scope limitation because we have no way satisfy ourselves with regard to beginning inventory and as such our COGS figures. The balance sheet should be fine if we are satisfied with ending inventory. So we disclaim an opinion on the Income statement and the related statement of cash flows.

AUD - (74),78
BEC - 85
FAR - 86
REG - 84

[Anonymous]

@iron_victory, thank you!! Good luck on Reg 🙂

[Anonymous]

@iron_victory, thank you!! Good luck on Reg 🙂

[mystical guy]

Additionally, Piecemeal opinions are allowed when the account is not material. E.g. balance sheet may not be in conformity with GAAP, overall, but the accounts receivable can be verified. However, the auditors report must be issued separately from the other contradictory report…e.g disclaimer.

That exception almost screwed me over. I was confused too

CPA - Since 2015
CISA - Smashed 2012
CIA - Passed 2015

[mystical guy]

Additionally, Piecemeal opinions are allowed when the account is not material. E.g. balance sheet may not be in conformity with GAAP, overall, but the accounts receivable can be verified. However, the auditors report must be issued separately from the other contradictory report…e.g disclaimer.

That exception almost screwed me over. I was confused too

CPA - Since 2015
CISA - Smashed 2012
CIA - Passed 2015

[Anonymous]

@mystical guy, thank you!! and congrats on passing all four parts!!

[Anonymous]

@mystical guy, thank you!! and congrats on passing all four parts!!

[Author]

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