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CSS Audit Tax Finance P-II QUESTION #1216
Question 1
When issuing an unqualified opinion, the auditor who evaluates audit findings should be satisfied that the:
  • Amount of known misstatement is documented in working papers
  • Estimates of the total likely misstatement is less than materiality level✔️
  • Estimates of the total likely misstatement is more than materiality level
  • Estimates of the total likely misstatement cannot be made
Correct Answer Explanation
An unqualified (clean) audit opinion is issued when the auditor concludes that the financial statements are free from material misstatement. This requires that the estimated total likely misstatement (both known and projected) is less than the materiality level established for the audit. If misstatements exceed materiality, a qualified or adverse opinion is required.