Question

When the auditor is unable to obtain sufficient appropriate evidence because the client did not allow a procedure to be completed, which of the following would the report most likely contain?

a. A Qualification: Yes; An Explanatory Paragraph After the Opinion Paragraph: No.
b. A Qualification: Yes; An Explanatory Paragraph After the Opinion Paragraph: Yes.
c. A Qualification: No; An Explanatory Paragraph After the Opinion Paragraph: Yes.
d. A Qualification: No; An Explanatory Paragraph After the Opinion Paragraph: No.

Answer 1

When an auditor cannot obtain necessary evidence due to client restrictions, the report likely includes both a qualification and an explanatory paragraph after the opinion paragraph, signaling a scope limitation and its potential effects on the financial statements.

Step-by-step explanation:

When an auditor is unable to obtain sufficient appropriate evidence because the client did not allow a procedure to be completed, the audit report will most likely contain a Qualification and an Explanatory Paragraph After the Opinion Paragraph. This scenario describes a limitation on the scope of the audit, which prevents the auditor from obtaining the necessary evidence to form an unqualified opinion on the financial statements.

Qualitative data and insights into the audit's findings should be conveyed clearly and concisely in the report, acknowledging what was observed as well as the limitations encountered due to the client's actions.