Park, CPA, was engaged to audit the financial statements of Tech Co., a new client, for the yearended December 31, Year 1. Park obtained sufficient audit evidence for all of Tech’s financialstatement items except Tech’s opening inventory. Due to inadequate financial records, Parkcould not verify Tech’s January 1, Year 1, inventory balances. Park’s opinion on Tech’s Year 1financial statements most likely will be
Answer: Unmodified, Disclaimer
Explanation:
The auditor may report on one basic financial statement and not on the others. Because the balance sheet presents information at a specific moment in time, the auditor should be able to become satisfied regarding the balances presented at year end. However, beginning inventory is included in the determination of the results of operations and cash flows. Thus, the auditor will probably not be able to form an opinion as to the fairness of these statements and should disclaim an opinion on them
