Which of the following statements is true about misstatement pervasiveness?

Which of the following statements is true about misstatement pervasiveness?

• A. Pervasiveness does not affect the type of opinion.
• B. Pervasiveness affects the type of opinion.
• C. Pervasiveness only affects the amount of testing.
• D. Pervasiveness is not mentioned.

Answer: (B)

Pervasiveness describes how widespread and significant the misstatements are across the financial statements, and that directly influences the auditor’s conclusion about fairness of presentation. If misstatements are pervasive—affecting many areas or the financial statements as a whole—the opinion is typically modified (for example, to qualified or adverse) because the statements cannot be relied upon as a whole. If the misstatements are material but not pervasive, the modification can be more limited (often a qualified opinion). That’s why this statement is true: pervasiveness guides the strength and scope of the auditor’s opinion. The idea that pervasiveness doesn’t affect the opinion, or only changes how much testing is done, isn’t accurate, and it’s not a matter left unmentioned in standards.

Pervasiveness describes how widespread and significant the misstatements are across the financial statements, and that directly influences the auditor’s conclusion about fairness of presentation. If misstatements are pervasive—affecting many areas or the financial statements as a whole—the opinion is typically modified (for example, to qualified or adverse) because the statements cannot be relied upon as a whole. If the misstatements are material but not pervasive, the modification can be more limited (often a qualified opinion). That’s why this statement is true: pervasiveness guides the strength and scope of the auditor’s opinion. The idea that pervasiveness doesn’t affect the opinion, or only changes how much testing is done, isn’t accurate, and it’s not a matter left unmentioned in standards.