A report that acknowledges reliance on the reports of component auditors is a type of report modification known as a(n)
A)Qualification
B)Division of responsibility
C)Expansion of scope
D)Scope limitations

Question

Quizplus · Accepted Answer

A report that acknowledges reliance on the reports of component auditors is a division of responsibility modification. This occurs when the auditor is responsible for part, but not all, of the financial statements. The auditor may choose to rely on the work of other auditors who have audited certain components of the financial statements, and this modification discloses that reliance. A qualification modification is used when the auditor disagrees with a certain aspect of the financial statements, an expansion of scope modification is used when additional procedures were performed that were not originally planned, and scope limitations occur when the auditor is unable to obtain sufficient evidence to support their opinion.

A Report That Acknowledges Reliance on the Reports of Component