![]() ![]() They conclude that the transactions or balances that they could not obtain evidence on are both material and pervasive in financial statements.Īdditionally, auditors may also disclaim an opinion when they face situations involving significant uncertainties or situations where they lack independence, e.g.They could not obtain sufficient appropriate audit evidence in order to form their opinion on financial statements and.The disclaimer of opinion is usually the most serious type of audit opinion, comparing to other modified opinions such as qualified opinion and adverse opinion because auditors actually state that they are ‘unable to form an opinion’.Īuditors must disclaim an opinion when they come across the two circumstances in which: In any case, the situation for the disclaimer of opinion is that auditors believe the matter is too material to even be able to express an opinion on the financial statements. However, unlike adverse opinion, auditors cannot form a basis of opinion either due to limitation of scope or involvement of significant uncertainties. The matter involved in this case is both material and pervasive. Disclaimer of opinion is the statement that independent external auditors issue saying that they do not express an opinion on the financial statements.
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