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When there is a scope restriction, what type of audit report can be issued?

1. Unmodified opinion
2. Qualification of scope and opinion
3. Disclaimer of opinion
4. Any of the above

Answer :

Final answer:

The correct answer is option 4. When there is a scope restriction, the type of audit report issued depends on the nature of the restriction, and can include a qualification of scope and opinion, or a disclaimer of opinion. An unmodified opinion is generally not possible. The correct option is any of the above.

Explanation:

When an audit is subject to a scope restriction, the type of audit report that can be issued depends on the extent and nature of the scope limitation. A scope restriction occurs when the auditor is unable to obtain sufficient appropriate audit evidence to form a conclusion on an area of the financial statements. There are several types of modified audit opinions that may be issued in such cases:

  • An unmodified opinion is generally not issued if there is a significant scope restriction. This opinion indicates that the financial statements present the entity's financial condition, results of operations, and cash flows fairly in all material respects.
  • A qualification of scope and opinion may be issued if the scope restriction is material but not pervasive. This means the auditor believes that the financial statements are fairly presented except for the effects of the matter to which the qualification relates.
  • A disclaimer of opinion may be issued when the scope restriction is so significant that the auditor cannot form an opinion on the overall financial statements. In such cases, the auditor does not express an opinion on the financial statements as a whole.

In summary, when there is a significant scope restriction, the auditor will usually issue either a qualification of scope and opinion or a disclaimer of opinion, rather than an unmodified opinion. Therefore, the correct option for the type of audit report that can be issued due to a scope restriction is option 4, any of the above, considering the specific context and severity of the restriction.

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