Find reasonable possibility of a significant material loss


Question:

Lose Big Inc., a U.S. company, is a defendant in a lawsuit alleging infringement of certain patent rights. However, the ultimate outcome of the litigation cannot be reasonably estimated by management. Janice Jones, CPA, believes there is a reasonable possibility of a significant material loss, but the lawsuit is adequately disclosed in the notes to the financial statements.

From the following opinion types, select and write the opinion type or types that can be used by the auditor. Up to two opinion types can be selected.

In addition, select and write the appropriate report modification options that are required to be made by the auditor. You can select as many options as apply. (Becker, Adopted)
Opinion Options

Unmodified
Except for qualified
Adverse
Disclaimer

Report Modification Options

Issue the independent auditorAc€?cs report without modification
Modify the introductory paragraph
Modify the auditorAc€?cs responsibility paragraph
Omit the auditorAc€?cs responsibility paragraph
Modify the opinion paragraph
Add an emphasis-of-matter paragraph preceding the opinion paragraph
Add an emphasis-of-matter paragraph following the opinion paragraph

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Accounting Basics: Find reasonable possibility of a significant material loss
Reference No:- TGS02054519

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