Which opinion is given when there are material but not pervasive issues identified in the audit?

When an audit identifies material but not pervasive issues, a qualified opinion is given. This type of opinion indicates that, except for the effects of the material misstatements, the financial statements present a true and fair view. It acknowledges specific issues but does not cast doubt on the overall integrity of the financial statements as a whole.

A qualified opinion is appropriate in situations where the auditor is unable to provide an unmodified opinion due to certain limitations or misstatements that are material in nature, yet these issues do not affect the entire set of financial statements or represent a pervasive concern. Therefore, the auditor can still state that, apart from these specific matters, the financial statements are reliable.

This opinion helps to convey that while there are concerns that must be addressed, they are contained and do not undermine the overall reliability of the financial statements. In situations where the issues are pervasive—meaning they affect multiple areas of the financial statements—the auditor would issue an adverse opinion, which indicates that the financial statements are not trustworthy. Conversely, a disclaimer would be used when the auditor cannot obtain sufficient appropriate audit evidence to form an opinion on the financial statements. An unmodified opinion indicates that the financial statements are free from material misstatement, which would not be applicable in this case