Choice "B" is correct. If material instances of noncompliance are identified, the auditor should express either a qualified or adverse opinion on compliance.
Choice "c" is incorrect. The auditor's report directs the reader to a separate schedule of findings after stating the importance of compliance testing and indicating that providing an opinion on compliance is not an objective of the audit.
Choice "a" is incorrect. The auditor's report directs the reader to a separate schedule of findings after stating the importance of compliance testing and indicating that providing an opinion on compliance is not an objective of the audit.
Choice "d" is incorrect. If material instances of noncompliance are identified, a disclaimer of opinion is not appropriate.