Scope Limitation On Accounts Receivable Audit

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12.25 A 12.29 D 12.33 D 12.37 A
12.26 D 12.30 B 12.34 A
12.27 A 12.31 A 12.35 C
12.28 C 12.32 C 12.36 D
12.39
a. In this situation, scope limitation on accounts receivable audit is created because auditors are unable to obtain sufficient appropriate evidence using alternative procedures. Thus, if the amounts of wrong account receivables are material but not pervasive, the auditor can issue qualified opinion. If the scope limitation if pervasive, meaning the amounts of this prohibition are very large, the auditor should issue disclaimer of opinion. When the amounts involved are immaterial, the auditor can issue unqualified report.
b. In this case, the entity failed to record the revenue, thus it is considered departure from …show more content…
The scope should be modified to explain the lack of sufficient appropriate evidence, and the auditor should qualify the opinion paragraph.
2. In this scenario, the auditor may express qualified opinion for a GAAP departure or adverse opinion, depending on the materiality of this issue. The auditor also should have additional paragraph to identify the departure from GAAP and dollar effects before the opinion paragraph.
3. The auditor should express qualified opinion for a departure from GAAS because of the materiality of this situation. Moreover, they have to add a paragraph to explain the amount of probable loss and explain the failure to report it in the income statement and balance sheet.
4. In this case, the auditor should express qualified opinion or a disclaimer of opinion, depending on the materiality of this situation. The scope paragraph should be modified to identify which standard was not satisfied and the lack of sufficient appropriate evidence. Therefore, the auditor should modify the standard opinion paragraph language.
5. The auditor can issue unqualified opinion for this situation. However, they should explain the omission in an additional paragraph following the standard report. When companies present supplementary information, auditors are required to expand their report on the financial statements to include a paragraph that identifies the supplementary information, and identifies any
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