What type of opinion should be given if financial statements are materially misstated but the misstatement is not pervasive?

When financial statements contain material misstatements that are not pervasive, the appropriate opinion to issue is a qualified opinion. A qualified opinion indicates that, except for the issues identified, the financial statements present a true and fair view in accordance with the applicable financial reporting framework.

If misstatements are material but not pervasive, it means that they affect only certain areas of the financial statements and do not fundamentally undermine the whole document. A qualified opinion allows the auditor to signal to users of the financial statements that while there are specific issues present, the overall financial position and performance are not completely compromised by these misstatements.

An unmodified opinion, on the other hand, is issued when the financial statements are free from material misstatements in every aspect, which is not the case here. An adverse opinion would be appropriate if the misstatements were pervasive and materially misrepresent the financial statements as a whole, indicating a serious issue that significantly affects the reliability of the financial statements. A disclaimer of opinion suggests that the auditor cannot express an opinion on the financial statements at all, often due to a lack of sufficient evidence, which does not apply in this situation where specific misstatements are identifiable.

Thus, the correct response is a qualified opinion due to the