ACC 5400 Chapter 3: 3
Document Summary
Auditor unable to satisfy himself/herself that fin/stmts are presented fairly. Severe limitation on scope of audit or non-independent relationship under aicpa btw auditor and client. When highest level of materiality exists, the auditor must issue either a disclaimer of opinion or an adverse opinion- depending on conditions. To evaluate materiality, auditor must combine all unadjusted misstatements and judge whether there may be individually immaterial misstatements that, when combined, sig. affect stmts. Dollar amts of some misstatements cannot be accurately measured. Clients unwillingness to disclose existing lawsuit for ex. Primary concern w/ measuring materiality when a client has failed to follow gaap is usually total dollar misstatement in accts involved. When there is a scope limitation in an audit, the audit report will be standard unmodified opinion report. When the auditor knows that f/s may be misleading bc not conforming w/ And client is unable or willing to correct misstatement.
