When auditors are engaged to examine an entity's financial statements but decide to issue a disclaimer of opinion because of a scope limitation, the report would not
A)identify management's responsibility for the financial statements.
B)refer to any scope limitation in the Basis for Opinion Section.
C)modify the Auditor's Responsibilities for the Audit of the Financial Statements Section to identify the basis for the disclaimer.
D)indicate that the auditors were engaged to audit the financial statements.

Question

Quizplus · Accepted Answer

The disclaimer of opinion report is issued when the auditor has enough evidence to form an opinion on the financial statements. However, the auditor believes that the scope limitation is material to the financial statements and prevents the auditor from expressing an opinion on the financial statements. The auditor's responsibility is to express an opinion on the financial statements, and if the auditor cannot do so, the auditor must issue a disclaimer of opinion report.

When Auditors Are Engaged to Examine an Entity's Financial Statements