CAF-8 · Chapter 14 · Question 3 of 10
A massive fire destroys the client's accounting servers, and no backups exist. The auditor cannot verify revenue, receivables, or inventory, representing 90% of the balance sheet. What type of report must the auditor issue?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Disclaimer of opinion
Explanation
When the auditor is unable to obtain sufficient appropriate audit evidence, and the possible effects of undetected misstatements could be both material and pervasive (affecting 90% of the financials), the auditor must disclaim an opinion.
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