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

The most critical factor in an auditor's decision to modify an issuer's financial statement opinion is the effect of a misstatement on the financial statements as a whole. When evaluating whether a modification of opinion is necessary, auditors assess the materiality of the misstatement in the context of the financial statements' overall accuracy and reliability.

If a misstatement is determined to be material, it potentially alters the users' understanding and decisions based on the financial statements. This can significantly affect the users' perception of the entity’s financial position or performance, leading the auditor to conclude that a modification is necessary to provide a fair presentation. The auditor must consider both qualitative and quantitative aspects of the misstatement to determine its overall impact on the financial statements. This comprehensive assessment directly influences the auditor's opinion, highlighting its critical importance in the decision-making process.

In contrast, while reports from other auditors, footnote uncertainties, and the types of users may influence the auditor's considerations, they do not weigh as heavily on the core issue of whether the financial statements are fairly presented in all material respects, which is fundamentally tied to the evaluation of misstatements.