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  • Restrictions Imposed by A Client Prohibit The Observation of Physical Inventories

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    Rosalie Colarte Langbay
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    The auditor was unable to observe physical inventories, which account for 35% of assets, due to client restrictions. While alternative procedures could not be performed for this portion, evidence for other financial statement items was satisfactory. As a key audit procedure was omitted for a material portion of assets, the auditor should issue a disclaimer of opinion. For a publicly held entity, if an independent CPA is associated with financial statements but did not audit or review them, the appropriate report is a compilation report to clarify the level of assurance provided.

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    Restrictions Imposed by a Client Prohibit the Observation of Physical Inventories

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    The auditor was unable to observe physical inventories, which account for 35% of assets, due to client restrictions. While alternative procedures could not be performed for this portion, evidence for other financial statement items was satisfactory. As a key audit procedure was omitted for a material portion of assets, the auditor should issue a disclaimer of opinion. For a publicly held entity, if an independent CPA is associated with financial statements but did not audit or review them, the appropriate report is a compilation report to clarify the level of assurance provided.

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    17 views1 page

    Restrictions Imposed by A Client Prohibit The Observation of Physical Inventories

    Uploaded by

    Rosalie Colarte Langbay
    The auditor was unable to observe physical inventories, which account for 35% of assets, due to client restrictions. While alternative procedures could not be performed for this portion, evidence for other financial statement items was satisfactory. As a key audit procedure was omitted for a material portion of assets, the auditor should issue a disclaimer of opinion. For a publicly held entity, if an independent CPA is associated with financial statements but did not audit or review them, the appropriate report is a compilation report to clarify the level of assurance provided.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    1.

    Restrictions imposed by a client prohibit the observation of physical inventories, which account for 35% of
    all assets. Alternative audit procedures cannot applied, although the auditor was able to examine
    satisfactory evidence for all other items in the financial statements. The auditor should issue a(an):
    a.  "Except for" qualified opinion.
    b. Disclaimer of opinion.
    c. Unqualified opinion with a separate explanatory paragraph.
    d. Unqualified opinion with an Explanation: in the scope paragraph.

    2. When an independent CPA is associated with the financial statements of a publicly held entity but has not
    audited or reviewed such statements, the appropriate form of report to be issued must include a(an):
    a. Compilation report.
    b. Disclaimer of opinion.
    c. Unaudited association report.
    d. Qualified opinion.

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