Final answer:
An auditor should consider a lawyer's refusal to provide corroborating information as a scope limitation, because it prevents the auditor from forming a complete opinion on the financial statements. This circumstance needs to be communicated in the auditor's report.
Step-by-step explanation:
If a lawyer refuses to furnish corroborating information regarding litigation, claims, and assessments, the auditor should consider the refusal to be a scope limitation. This is because auditors rely on such information to form an opinion on the financial statements and assess the associated risks. The confidentiality of the client-lawyer relationship is important, but it does not negate the auditor's need for information. If management can provide the information, the auditor may attempt to obtain it from them, but often the lawyer has the most authoritative knowledge regarding legal matters.
If the information cannot be obtained, it may prevent the auditor from forming a complete opinion, thus affecting the nature of the auditor's report. In such cases, this fact should be communicated to the users of the financial statements through the auditor's report, which may include a scope limitation paragraph.