Disclaimer of Opinion

Question 1

When would you issue a disclaimer of opinion?

Answer 1

Scope limitation that is material and pervasive to the F/S

Question 2

What are the effects of a disclaimer of opinion on the audit report?

Answer 2

1) Introduction: Wording change to “We were engaged to audit” rather than “we have audited”
2) Management Responsibility: No Change
3) Auditor’s Responsibility: ONE PARAGRAPH ONLY and add “because of the matter described in the Basis for Disclaimer of opinion paragraph; however, we were unable to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion”
4) Disclaimer of Opinion: Because of the significance of the matter described in the Basis for Disclaimer of Opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis of an audit opinion. Accordingly, we do not express an opinion on these financial statements.

Question 3

if you issue a disclaimer of opinion, what is the meaning?

Answer 3

There is NO conclusion. We are not stating an opinion whatsoever.

Question 4

If management refuses to sign the management rep letter, would that cause a disclaimer of opinion?

Answer 4

Yes, that is pervaisive