ACCA AA · Chapter 12 · Question 8 of 9
Management refuses to provide a written representation confirming that it has fulfilled its responsibility for preparing the financial statements and for providing the auditor with all relevant information. What is the required effect on the auditor's report under ISA 580?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) The auditor must disclaim an opinion
Explanation
These representations are fundamental. If management refuses to provide them, ISA 580 requires the auditor to disclaim an opinion, because the auditor cannot rely on any of management's other representations and the possible effects are pervasive. An adverse opinion would only be appropriate if the financial statements were known to be materially and pervasively misstated.
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