When an auditor encounters a situation involving more than one of the conditions requiring a departure from a standard unmodified report, the auditor should modify his or her opinion for each condition unless one has the effect of neutralizing the others. In which of the following situations would the auditor not include more than one modification in the report?
A) There is a material scope limitation, and the auditor is not independent.
B) There is a substantial doubt about the company's ability to continue as a going concern, and information about the causes of the uncertainties is not adequately disclosed in a footnote.
C) There is a material IFRS violation, and the auditor is not independent.
D) There is a material scope limitation, and there is substantial doubt about the company's ability to continue as a going concern.

Question

Quizplus · Accepted Answer

If an auditor is not independent, they cannot issue an audit report on the financial statements. Independence is a fundamental principle that must be maintained for the audit to be valid. In situation A, the lack of independence is a fundamental issue that precludes the auditor from issuing any audit opinion, making the scope limitation irrelevant in this context.

When an Auditor Encounters a Situation Involving More Than One