Restrictions imposed by an entity prohibited the observation of physical inventories, which accounted for 35 percent of total assets. Alternative auditing procedures were not feasible, although the auditors were able to examine satisfactory evidence for all other items in the financial statements. The auditors would most likely express ___.

Question

Makhi Kerr

Business

5 September, 15:55

Restrictions imposed by an entity prohibited the observation of physical inventories, which accounted for 35 percent of total assets. Alternative auditing procedures were not feasible, although the auditors were able to examine satisfactory evidence for all other items in the financial statements. The auditors would most likely express ___.

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Jayleen Tran · Answer 1

Answer: disclaimer of opinion on the financial statements

Explanation: Disclaimer of opinion is an auditor's assertion that there is no view on a customer's financial reports. For many purposes, this notice may be given.

The auditor might not have been required or able to finish all proposed audit procedures, for example. Or, with such a degree that perhaps the auditor was also unable to express an opinion, the customer limited the applicability of the investigation.

If the client requires the auditor to perform the scheduled work or corrects an existing irregularity, a safe judgment may be given by the auditor. The warning remains in effect till the auditor gives a substitute judgment.