Because the auditor was engaged to undertake the audit after the year-end and was unable to physically examine inventory, the auditor has not accumulated sufficient appropriate evidence to determine whether the financial report is presented fairly.The auditor must depart from the unmodified audit report because the:
A) scope of the audit has been restricted by circumstances beyond either the client's or the auditor's control.
B) auditor has lost independence.
C) financial report has not been prepared in accordance with accounting standards.
D) scope of the audit has been limited.

Question

Quizplus · Accepted Answer

The scenario suggests that the auditor was not able to obtain sufficient appropriate evidence to determine the fairness of inventory presentation because of a limited scope of the audit, which is caused by the inability to physically examine inventory. As a result, the auditor cannot issue an unmodified audit report, and the appropriate choice would be to depart from an unmodified audit report because the scope of the audit has been limited. Choice A is incorrect because, despite the restriction of the audit scope, the auditor's independence, and the client's were never compromised. Similarly, choice B and C are irrelevant to the given scenario.

Because the Auditor Was Engaged to Undertake the Audit After