Under ISA 720, if the auditor identifies a material inconsistency in the 'Other Information' (such as a summary financial review in the annual report) that management refuses to correct, what is the correct reporting action if the financial statements themselves are free from error?

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Economics · Other Information in Audit Reports

Verified Solution4 OptionsUpdated: October 2026👁️1 View

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Correct answer

Issue an unmodified audit opinion and describe the uncorrected material misstatement of other information in the 'Other Information' section.

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Answer 1

Issue an unmodified audit opinion and describe the uncorrected misstatement in an 'Other Matter' paragraph.

Answer 2

Issue an unmodified audit opinion and describe the uncorrected material misstatement of other information in the 'Other Information' section.

Answer 3

Modify the audit opinion on the financial statements to Adverse.

Answer 4

Modify the audit opinion on the financial statements to Qualified.

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