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Hi Tutor,
Could you pls tell if there is a difference between:
When management imposes limitation of scope and the matter is considered pervasive, the auditor must withdraw from the audit (ISA 705, 13 bii)
And,
Due to some reasons auditor couldn’t gather sufficient appropriate audit evidence, they disclaim the opinion.
An auditor should not accept an audit assignment in the first place if aware that management will impose a limitation on the scope of the audit – by withdrawing from the engagement i.e. resigning, the auditor “triggers” certain rights and duties which would bring concerns to the attention of the shareholders (and others). For example, in the UK, the auditor must deliver a “statement of circumstances” with his notice of resignation and has the right to be heard at the AGM at which his term of office would have expired.
The auditor disclaims an opinion if a limitation in scope is pervasive for some other reason (e.g. all the accounting records were destroyed in a fire).
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