Auditing and Attestation - Certified Public Accountant (CPA) Practice Exam 2026 - Free CPA Practice Questions and Study Guide

When an auditor issues an unmodified opinion on consolidated financial statements, it indicates that the financial statements present a true and fair view in accordance with relevant accounting principles. In this context, the absence of a modification implies that the work of component auditors is generally accepted and their contributions are implicitly considered satisfactory. Therefore, the report does not need to specifically mention the component auditors, reflecting that their work has been integrated into the overall conclusion about the consolidated statements.

This choice highlights the streamlined approach of the auditor in reporting, where they do not need to reference the component auditors if they are not modifying the opinion. Instead, the focus remains on the overall fairness and accuracy of the consolidated financial statements as a whole.

Regarding the other options, they involve responsibilities or actions that are not applicable when the auditor issues an unmodified opinion. There would be no need for a modified opinion if the financial statements comply with the standards, and the work of the component auditors isn't disregarded but rather included in the unmodified opinion. The situation also does not imply any additional responsibility for external audit failures in relation to the unmodified opinion. Thus, the focus on the unmodified opinion speaks to the sufficiency of the audit conducted and the confidence in the presented financials.