Harris & Thompson Were Engaged to Audit Smart Corp's Comparative

Harris & Thompson were engaged to audit Smart Corp's comparative financial statements for the years ended December 31, Year 1 and Year 2. The Year 1 financial statements were presented in accordance with generally accepted accounting principles, but the Year 2 financial statements were determined to be materially misstated. As a result, Harris & Thompson should

A) issue a qualified opinion on the comparative financial statements as a whole.
B) issue an unmodified opinion on the Year 1 financial statements and disclaim an opinion on the Year 2 financial statements.
C) issue an unmodified opinion on the Year 1 financial statements and a qualified opinion on the Year 2 financial statements.
D) reissue the previous opinion on the Year 1 financial statements and withdraw from the engagement.

Correct Answer:

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