As a result of management's refusal to permit the auditor to physically examine inventory, 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 financial statements have not been audited in accordance with GAAS.
D)the scope of the audit has been restricted.

Question

Quizplus · Accepted Answer

The refusal to physically examine inventory restricts the audit scope, therefore the auditor must depart from an unqualified opinion and disclose the limitation in the audit report. This is considered a scope limitation.

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