A limitation on the scope of an audit sufficient to preclude an unqualified opinion will usually result when management:

Question

Quizplus · Accepted Answer

Choice "A" is correct. Restrictions on the scope of the audit, such as the timing of the work, the inability to obtain sufficient appropriate audit evidence, or an inadequacy in the accounting records, may require the auditor to qualify or disclaim an opinion. Inability to obtain audited financial statements supporting the entity's investment in a foreign subsidiary is such a restriction on the scope of the audit. Choice "B" is incorrect. Client refusal to disclose related party transactions in the notes to the financial statements is a GAAP problem, not a scope problem. For a GAAP problem, the auditor must either issue a qualified or adverse opinion. Choice "C" is incorrect. The auditor sends an engagement letter to the client, not vice versa. Choice "D" is incorrect. Management may choose not to correct a significant deficiency in internal control if the cost of correcting the condition outweighs the benefit.

A Limitation on the Scope of an Audit Sufficient to Preclude