In which of the following situations would an auditor ordinarily choose between expressing a qualified opinion or an adverse opinion?
- The auditor did not observe the entity’s physical inventory and is unable to become satisfied about its balance by other auditing procedures.
- Conditions that cause the auditor to have substantial doubt about the entity’s ability to continue as a going concern are inadequately disclosed.
- There has been a change in accounting principles that has a material effect on the comparability of the entity’s financial statements.
- The auditor is unable to apply necessary procedures concerning an investor’s share of an investee’s earnings recognized on the equity method.