Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

What opinion is least likely when financial statements are not in conformity with GAAP regarding leases?

1. Qualified opinion

2. Unmodified opinion

3. Adverse opinion

4. Disclaimer of opinion

The correct answer is: Disclaimer of opinion

The least likely opinion when financial statements are not in conformity with GAAP regarding leases is a disclaimer of opinion. A disclaimer of opinion typically occurs when an auditor is unable to obtain sufficient appropriate audit evidence on which to base an opinion; this is more about a lack of access to necessary information rather than a direct issue of non-conformity with accounting principles like GAAP. In situations where the financial statements do not conform to GAAP, there are generally two possible opinions that can be issued to address such non-conformity: a qualified opinion or an adverse opinion. A qualified opinion would be given if the nonconformity is material but not pervasive, meaning the issue affects some areas of the financial statements but does not overshadow the overall financial picture. An adverse opinion would be applicable when the nonconformity is both material and pervasive, suggesting that the financial statements are misleading and do not present a true and fair view. An unmodified opinion reflects that the financial statements conform to GAAP without exceptions, which would not apply when there are issues related to leases that deviate from GAAP. Therefore, the presence of non-conformity with GAAP regarding leases would eliminate the possibility of an unmodified opinion as well. Thus, given the