Question

When dealing with materiality and scope limitation conditions, which of the following statements is true?

1) A disclaimer of opinion must be issued.
2) It is easier to evaluate the materiality of potential misstatements resulting from a scope limitation than for failure to follow GAAP.
3) Scope limitations imposed by the client are always considered material.
4) A unqualified opinion may still be issued depending on the materiality of the scope limitation.

Answer 1

The true statement regarding materiality and scope limitation conditions is that a unqualified opinion may still be issued.

Step-by-step explanation:

In relation to materiality and scope limitation conditions, the statement that is true is that a unqualified opinion may still be issued depending on the materiality of the scope limitation.

A disclaimer of opinion is not necessary when dealing with materiality and scope limitation conditions. Evaluating the materiality of potential misstatements resulting from a scope limitation may be more challenging compared to assessing the failure to follow GAAP. The materiality of scope limitations imposed by the client is not automatically considered; it depends on the specific circumstances.