When is a disclaimer of opinion issued?
A)When a scope limitation is material and pervasive
B)When a scope limitation is materia l but not pervasive
C)When a misstatement is material and pervasive
D)When scope limitation is eliminated by alternative procedures

Question

Quizplus · Accepted Answer

A disclaimer of opinion is issued when a scope limitation is material and pervasive, which means it affects a significant portion of the financial statements and the auditor is not able to obtain sufficient evidence to form an opinion on the financial statements as a whole. Other types of scope limitations may result in qualified or adverse opinions. Material misstatements that cannot be corrected by management may also result in disclaimers of opinion. If the scope limitation is eliminated by alternative procedures, the auditor can issue an unmodified opinion.

When Is a Disclaimer of Opinion Issued