The refusal of an entity's attorney to provide a representation on the legality of a particular act committed by the entity is generally:
A)sufficient reason to issue a "subject to" qualified opinion.
B)considered to be a scope limitation.
C)insufficient reason to modify the auditor's report because of the attorney's obligation of confidentiality.
D)proper grounds to withdraw from the engagement without further consideration.

Question

Quizplus · Accepted Answer

When an attorney refuses to provide a representation on the legality of a particular act committed by the entity, it is considered to be a scope limitation. This means that the auditor is unable to obtain sufficient appropriate audit evidence on the legality of the act, and it limits the scope of the audit. As such, the auditor may need to issue a qualified opinion or an adverse opinion, depending on the materiality and pervasiveness of the matter. However, it is not a reason to withdraw from the engagement, and the attorney's obligation of confidentiality does not prevent the auditor from modifying the auditor's report if necessary.

The Refusal of an Entity's Attorney to Provide a Representation