[Anonymous]

Can someone explains this to me? I’m just not getting this…

When an auditor qualifies an opinion because of the inability to confirm A/R by direct communications with debtors, the wording of the opinion paragraph of the auditor’s report should indicate that the qualification pertains to the :

a) Limitation of the auditor’s scope

b) Possible effects on the financial statements (correct answer)

c)Lack of sufficient appropriate audit evidence

d) departure from GAAP

How is it not A? Limitation of the auditor’s scope…. The scope was obviously limited, because the auditor couldn’t confirm A/R right? so shouldn’t the qualification pertain to the scope ???

[leeconolly]

I'm not sure what study materials you are using, but if you are using Becker, it's explained on pg. A1-41 in a pass key. Basically, the auditor should refer to the possible effect of the matter on the financial statements, and referencing the scope limitation itself is not acceptable. Doesn't go too far into the “why” of it though… Hope that helps!

Mommy needs a cookie. Holding the vodka off until the next kid comes out in August! Can't believe I'm done!

FAR - 8/29/13 ... 87
AUD - 10/14/13 ... 83
BEC - 12/06/13 ... 80
REG - 5/29/14 ... 85

[leeconolly]

I'm not sure what study materials you are using, but if you are using Becker, it's explained on pg. A1-41 in a pass key. Basically, the auditor should refer to the possible effect of the matter on the financial statements, and referencing the scope limitation itself is not acceptable. Doesn't go too far into the “why” of it though… Hope that helps!

Mommy needs a cookie. Holding the vodka off until the next kid comes out in August! Can't believe I'm done!

FAR - 8/29/13 ... 87
AUD - 10/14/13 ... 83
BEC - 12/06/13 ... 80
REG - 5/29/14 ... 85

[Anonymous]

While it is a scope limitation, it is will affect the financial statements more, as in they could be falsified and may not even exist when they can't be verified. False financial statements are not a scope limitation.

[Anonymous]

While it is a scope limitation, it is will affect the financial statements more, as in they could be falsified and may not even exist when they can't be verified. False financial statements are not a scope limitation.

[Iron_Victory]

I believe in this context they may be talking about a limited scope engagement (limitations of the AUDITORS scope) for answer A and not the scope limitation that prevents obtaining of sufficient appropriate audit evidence which would qualify the opinion in this question.

AUD - (74),78
BEC - 85
FAR - 86
REG - 84

[Iron_Victory]

I believe in this context they may be talking about a limited scope engagement (limitations of the AUDITORS scope) for answer A and not the scope limitation that prevents obtaining of sufficient appropriate audit evidence which would qualify the opinion in this question.

AUD - (74),78
BEC - 85
FAR - 86
REG - 84

[barelystayingsane]

Remember that the opinion paragraph always deals with GAAP issues, so it would discuss the possible effects on the FS, NOT the scope limitation (which is a GAAS issue). I remember having trouble with this, but it is something you will just have to memorize, since it is a key part of the audit report.

[barelystayingsane]

Remember that the opinion paragraph always deals with GAAP issues, so it would discuss the possible effects on the FS, NOT the scope limitation (which is a GAAS issue). I remember having trouble with this, but it is something you will just have to memorize, since it is a key part of the audit report.

[Anonymous]

@Barelystayingsane AH! You got it.. The one Keyword… in the wording of the “””Opinion Paragraph”””!!!!! How did I miss that?! Thanks, I will have to analyze every single darn word in a sentence for this exam…

@leeconolly Yes, and Thanks, for the reference on that page.. it was word for word… This is exam is so crazy, how can anyone memorize this whole thing word for word..

[Anonymous]

@Barelystayingsane AH! You got it.. The one Keyword… in the wording of the “””Opinion Paragraph”””!!!!! How did I miss that?! Thanks, I will have to analyze every single darn word in a sentence for this exam…

@leeconolly Yes, and Thanks, for the reference on that page.. it was word for word… This is exam is so crazy, how can anyone memorize this whole thing word for word..

[Author]

Replies