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In which one of the following instances would an auditor most likely issue a disclaimer of opinion?

a. Management will not sign a management representation letter.
b. Management declines to provide a statement of cash flow.
c. The auditor is independent of the client.
d. The auditor is unable to confirm receivables but performs alternative procedures.

User Alex Hill
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1 Answer

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Final answer:

An auditor would issue a disclaimer of opinion when management does not provide a signed management representation letter, as it's vital for audit evidence and the formation of the audit opinion.

Step-by-step explanation:

An auditor would most likely issue a disclaimer of opinion if the management will not sign a management representation letter. A disclaimer of opinion is issued when the auditor is not able to obtain sufficient appropriate audit evidence on which to base the opinion, and the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive.

The management representation letter is important because it serves as written confirmation from management regarding the accuracy and completeness of information provided to the auditors, which is a critical part of the audit evidence an auditor collects.

User FelikZ
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