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Question

AB & Co, chartered accountant, have been requested by their client XYZ, Ltd. not to confirm accounts receivables because of concerns about creasing conflicts with customers over amounts owed. The auditors were satisfied concerning receivable after applying alternative audit procedures AB & Co.'s auditors report likely contained ____________ .

A
Qualified opinion
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B
Disclaimer of opinion
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C
Unqualified opinion with an explanatory paragraph
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D
Unqualified opinion
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Solution

The correct option is C Unqualified opinion with an explanatory paragraph
Here, on a special request by the auditee, the auditor has not been able to confirm by a method which is normally adopted by the auditor, instead, on performing an alternative procedure, auditor is satisfied of the amount owned by the client.
If the alternative method would not have given results, the auditor may have qualified his report ,but it is not the case, hence auditor may give an unqualified report, assuming other things being normal.

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