In addition, the type of opinion, based on the reservation made, depends on two factors: 1. Situations where the auditor is unable to obtain sufficient appropriate audit evidence to base the audit on. For example, a company that uses an incorrect accounting method faces a GAAP departure. Situations where the financial statements deviate from the established accounting criteria. Understanding Reservations in an Independent Auditor’s Report The opinion issued depends on the type of reservation, which depends upon (1) materiality, and (2) pervasiveness.There are two types of reservations that can be made: a GAAP departure or a scope limitation.In the independent auditor’s report, an auditor can issue one of five different opinions.
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