Auditor will provide qualified opinion or disclaimer opinion in case while conducting audit, auditor is unable to obtain sufficient and appropriate audit evidence due to scope limitation. A qualified opinion or a disclaimer opinion will require auditor to include a basis of modification paragraph before the opinion paragraph. In basis of modification paragraph, auditor will include the possible effects of the matter resulting due to scope limitation. If the scope limitation is imposed by client, and management refuses to remove the limitation, auditor is required to communicate the matter to those charged with governance. In case of scope limitations, auditor is required to try and obtain sufficient and appropriate audit evidence by performing alternative audit procedures. If sufficient and appropriate audit evidence is obtained by performing alternative audit procedures, audit will not modify the standard audit report. In evidence is not obtained, auditor will choose to provide a qualified or a disclaimer opinion. There is a difference between limited reporting objective and scope limitation. If auditor is requested to report only on a part of financial statement, it will be a case of limited reporting objective and not scope limitation. Examples of scope limitations are when auditor is refused by the client to send confirmation to the customers and when accounting records are destroyed and not available for audit. Depending on pervasiveness of information, auditor will choose to provide a qualified opinion or disclaimer opinion in case of scope limitations.
