When are an auditor's reporting responsibilities not met by attaching an explanation of the circumstances and a disclaimer of opinion to the entity's financial statement?
A)When the independent auditor with sufficient appropriate evidence believes the financial statements are not prepared in accordance with GAAP.
B)When the auditor was unable to observe the taking of the physical inventory.
C)When the auditor is not independent.
D)When the auditor has performed insufficient auditing procedures to express an opinion.

Question

Quizplus · Accepted Answer

Attaching an explanation of the circumstances and a disclaimer of opinion is only appropriate when the auditor is unable to form an opinion on the financial statements due to limitations on the scope of the audit or lack of independence. If the auditor has sufficient appropriate evidence to believe that the financial statements are not prepared in accordance with GAAP, then a disclaimer of opinion with explanation does not meet the reporting responsibilities.

When Are an Auditor's Reporting Responsibilities Not Met by Attaching