As a result of management's refusal to permit the auditor to physically examine inventory, the auditor has not accumulated sufficient evidence to conclude whether financial statements are stated in accordance with ASPE (Accounting Standards for Private Enterprises). The auditor must depart from the unqualified audit report because
A) the financial statements have not been prepared in accordance with GAAP.
B) the scope of the audit has been restricted by circumstances beyond either the client's or auditor's control.
C) the auditor has lost independence.
D) the scope of the audit has been restricted by the client.

Question

Quizplus · Accepted Answer

The scope of the audit has been restricted by the client, as management's refusal to allow the auditor to examine inventory limits the auditor's ability to gather sufficient evidence.

As a Result of Management's Refusal to Permit the Auditor