Under which of the following set of circumstances might the auditors disclaim an opinion?
A) The financial statements contain a departure from generally accepted accounting principles, the effect of which is material.
B) The group auditors decide to make reference to the report of component auditor who audited a subsidiary.
C) There has been a material change between periods in the method of application of accounting principles.
D) There are significant scope limitations on the audit.

Question

Quizplus · Accepted Answer

When there are significant scope limitations on the audit, the auditors may not have been able to obtain sufficient appropriate audit evidence to support their opinion on the financial statements. In such cases, the auditors may disclaim an opinion, which means they cannot express an opinion on the financial statements. The other options listed may result in qualified opinions or explanatory paragraphs in the audit report, but they do not necessarily lead to a disclaimer of opinion.

Under Which of the Following Set of Circumstances Might the Auditors