Conditions requiring a departure from an unmodified audit report include all but which of the following?
A) Management refused to allow the auditor to confirm significant accounts receivable for which there were no alternative procedures performed.
B) Management has determined that fixed assets should be reported in the balance sheet at their replacement values rather than historical costs. The auditors do not concur.
C) Management decided not to allow the auditor to confirm significant accounts receivable, but the auditor obtained sufficient appropriate evidence by examining subsequent cash receipts.
D) The audit partner's dependent child received a gift of 100 shares of a client's stock for her birthday from a grandparent.

Question

Quizplus · Accepted Answer

C) is the correct choice because it describes a situation where, despite an initial limitation (management not allowing confirmation of significant accounts receivable), the auditor was able to obtain sufficient appropriate audit evidence through alternative procedures (examining subsequent cash receipts). This would not require a departure from an unmodified audit report, as the auditor was still able to satisfactorily complete the audit procedures.

Conditions Requiring a Departure from an Unmodified Audit Report Include