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

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When future uncertainties are adequately disclosed and not reasonably estimable, how should the auditor report?

Unmodified opinion.
"Except for" qualified opinion.
Adverse opinion.
"Subject to" qualified opinion.

The correct answer is: Unmodified opinion.

When future uncertainties are adequately disclosed and not reasonably estimable, the auditor reports an unmodified opinion. This opinion signifies that the financial statements present a true and fair view of the company's financial position and operations, in accordance with the applicable financial reporting framework, despite the presence of uncertainties. The critical aspect here is that the uncertainties have been adequately disclosed in the financial statements. Since there is transparency regarding the uncertainties, and because they are not reasonably estimable, the auditor does not perceive this situation as a misstatement. Therefore, no modifications to the opinion are needed, and the unmodified opinion reflects a clean state regarding the audit findings. Factors like "except for" qualified opinions or adverse opinions would be applicable if there were significant misstatements or lack of disclosures, but since the company appropriately disclosed the uncertainties, these scenarios do not apply. Hence, the auditor can confidently issue an unmodified opinion.