Prior to audit engagement mgt has put a limitation on scope and thus auditor thinks he will give CASE 1 DISCLAIMER CASE 2 QUALIFIED i think he should reject in case 1 and accept in case 2 as in book the word mentioned is DISCLAIMING AN OPINION ON FS but in video u told if report is to be modified than dont accept…in book it is written only DISCLAIMING not qualified…plz clarify

1 answer

Ravi Staff March 11, 2018

From SA 210
Limitation on Scope Prior to Audit Engagement Acceptance
If management or those charged with governance impose a limitation on the scope of the auditor‟s work in the terms of a proposed audit engagement such that the auditor believes the “limitation will result in the auditor disclaiming an opinion on the financial statements, the auditor shall not accept such a limited engagement as an audit engagement, unless required by law or regulation to do so.
 
From above, Yes i agree if resulting is disclaimer then he should not accept and if result is qualified he can accept and qualify in future, should inform management about consequences while accepting

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