Newrit Co. is currently being audited and the auditor has discovered that the finance function is outsourced to Jay Co. The auditor has contacted Jay Co. but they are unable to provide them with the any financial records of Newrit Co. due to a recent fire that destroyed all the records. ?
What action should the auditor take?
A) The auditor should issue an unmodified audit report with an Emphasis of Matter Paragraph.
B) The auditor should issue a modified audit report with an adverse audit opinion.
C) The auditor should issue a modified audit report with an 'except for' paragraph.
D) The auditor should issue a disclaimer of opinion.

Question

Quizplus · Accepted Answer

The auditor should issue a disclaimer of opinion because they are unable to obtain sufficient appropriate audit evidence due to the destruction of financial records, which is a limitation on the scope of the audit.

Newrit Co Is Currently Being Audited and the Auditor Has Discovered