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

When an auditor qualifies their opinion due to inadequate disclosure, it is essential to modify both the opinion paragraph and the auditor's responsibility paragraph in the audit report. The opinion paragraph must be adjusted to reflect the qualification, clearly stating that the financial statements are in accordance with the applicable financial reporting framework except for the omission of specific disclosures. This gives users of the financial statements a clear understanding of the limitation in the financial information being presented.

The auditor's responsibility paragraph also requires modification because it is crucial to communicate the nature of the limitation in disclosures and how it impacts the audit. This paragraph should explicitly mention that the adequacy of disclosure was assessed as part of the audit process and that the modified opinion is related to insufficient disclosures. This comprehensive modification ensures that readers of the audit report are fully informed about the implications of inadequate disclosure on the audit and the financial statements as a whole.