The refusal of an entity's attorney to provide a representation on the legality of a particular act committed by the entity is generally
A) Sufficient reason to issue a "subject to" qualified opinion.
B) Considered to be a scope limitation.
C) Insufficient reason to modify the auditor's report because of the attorney's obligation of confidentiality.
D) Proper grounds to withdraw from the engagement without further consideration.

Question

Quizplus · Accepted Answer

The attorney's refusal to provide a representation on the legality of a particular act committed by the entity is considered to be a scope limitation because it prevents the auditor from obtaining sufficient appropriate evidence to form an opinion on the financial statements. As a result, the auditor should consider the effect of this scope limitation on the auditor's report and may need to issue a qualified opinion or disclaimer of opinion. However, it does not necessarily provide sufficient grounds for the auditor to withdraw from the engagement.

The Refusal of an Entity's Attorney to Provide a Representation