Accounting · Auditing Standards and NBFCs
For an NBFC-MFI, if microloans are grouped for impairment assessment but group homogeneity is questionable due to regional risks, and the auditor per SA 450 evaluates the resulting misstatement as both material and pervasive to the financial statements, what is the appropriate audit opinion?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Unmodified opinion with a Key Audit Matter (KAM)
- 2Disclaimer of opinion due to estimation uncertainty
- 3Qualified opinion for asset quality non-compliance
- 4Adverse opinion because it pervasively affects asset valuation and capital adequacy✓
Correct answer
Adverse opinion because it pervasively affects asset valuation and capital adequacy
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