[Porma Fierles]

So during an audit,, “FGH Company’s attorney has refused to respond to the letter of inquiry, either in writing or orally.”

My answer: 3. If it were the only situation discovered, the fact that FGH Company’s attorney has refused to respond to the letter of inquiry, either in writing or orally, would cause the auditor to issue which type of opinion? Disclaimer

Test Bank answer:
3. If it were the only situation discovered, the fact that FGH Company’s attorney has refused to respond to the letter of inquiry, either in writing or orally, would cause the auditor to issue which type of opinion? Qualified
A lawyer’s refusal to furnish the information requested in an inquiry letter either in writing or orally would be a limitation on the scope of the audit sufficient to preclude an unmodified opinion. The auditor would issue a qualified opinion or a disclaimer of opinion, depending on the amount of the scope limitation. (AU-C 501.24)

So, wouldn’t my answer Disclaimer be right too?! It marked disclaimer as wrong, but their explanation says it could be qualified or disclaimer.

Thanks.

[mylifeisover]

That is my problem with questions not giving you enough to know how material it is to the company. The answer is qualified or disclaimer but the fact that it was not an option for you to choose both makes it difficult to answer the question. I guess if the question indicated that the amount was significant you would choose disclaimer.

[ZombieMouse]

The key is the part of the question which states “if it were the only situation discovered…” This suggests that the scope limitation is not pervasive. In order for a disclaimer of opinion to be appropriate, the scope limitation would have to be both material and pervasive. Since it isn't, a modified opinion is appropriate but a disclaimer is not.

[Author]

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