Situations in which audit teams are unable to obtain sufficient appropriate evidence necessary to support their opinion on the entity's financial statements are referred to as scope imitations
Required:
a. Assume that a circumstance-imposed scope limitation prevented audit teams from performing procedures they considered to be necessary. How would each of the following factors independently influence the opinion expressed on the entity's financial statements?
1. The account balances affected by the scope limitation are not material to the entity's financial position, results of operations, or cash flows.
2. The account balances affected by the scope limitation are material to the entity's financial position, results of operations, and cash flows. However, the audit team is able to perform alternative procedures that provide evidence supporting the accounts affected by the scope limitation.
3. The account balances affected by the scope imitation are maternal to the entity's financial position, results of operations, and cash flows. Because of a lack of supporting documentation and key accounting records, the audit team is unable to perform alternative procedures that provide evidence supporting the accounts affected by the scope limitation.
b. For each of the situations in part (a), briefly describe how the auditors' report on the entity's financial statements would be affected. (Assume the entity is a non-issuer and do not rewrite or draft the report that would be issued in each of these circumstances.)
