Item$3$

$2\mathrm{.}5$points

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Item $3$

Situations in which audit teams are unable to obtain sufficient appropriate evidence necessary to support their opinion on the entity$$s financial statements are referred to as scope limitations$.$

Required:

Assume that a circumstance$-$imposed scope limitation prevented audit teams from performing procedures they considered to be necessary. How would each of the following factors independently influence the opinion expressed on the entity$$s financial statements?

The account balances affected by the scope limitation are not material to the entity$$s financial position, results of operations, or cash flows.The account balances affected by the scope limitation are material to the entity$$s financial position, results of operations, and cash flows. However, the audit team is able to perform alternative procedures that provide evidence supporting the accounts affected by the scope limitation$.$The account balances affected by the scope limitation are material to the entity$$s financial position, results of operations, and cash flows. Because of a lack of supporting documentation and key accounting records, the audit team is unable to perform alternative procedures that provide evidence supporting the accounts affected by the scope limitation$.$

For each of the situations in part $($a$),$ briefly describe how the auditors$$ report on the entity$$s financial statements would be affected. $($Assume the entity is a non$-$issuer and do not rewrite or draft the report that would be issued in each of these circumstances.$)$