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Sir,for this technical article: https://www.accaglobal.com/uk/en/student/exam-support-resources/professional-exams-study-resources/p7/technical-articles/acceptance-decisions.html
under “Preconditions for an audit”
“In relation to the final bullet point, if management impose a limitation on the scope of the auditor’s work in the terms of a proposed audit engagement, the auditor should decline the audit engagement if the limitation could result in the auditor having to disclaim the opinion on the financial statements. ”Disclaimer of opinion is for material and pervasive (could not obtain sufficient and appropriate audit evidence), how about if they impose a limitation will result in qualified opinion, will the auditor decline the audit engagement or only when it will be issued disclaimer of opinion?
Thank you.
Auditor’s primary responsibility is to report an opinion but to disclaim an opinion means “we are unable to give an opinion”. So what the precondition is saying is that you should not enter into an audit engagement in the expectation/belief that you cannot given an opinion.
Management should not impose limitations on the scope of the audit so if any are known from the outset I suggest the auditor should decline the engagement – e.g. if management will not give access to all books and records that would be a pervasive matter.
Limitations that are not within management’s control will most likely only be discovered during the audit and less likely to be pervasive (i.e. confined to individual classes of transactions or account balances).
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