CAF-8 · Chapter 15 · Question 10 of 10
Management absolutely refuses to provide the fundamental written representation acknowledging their responsibility for preparing the financial statements and providing the auditor with all information. What is the mandatory reporting consequence?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Disclaim an opinion on the financial statements.
Explanation
Under ISA 580 and ISA 705, if management refuses to provide the core representations confirming their fundamental responsibilities (the very premise of an audit), the auditor cannot rely on any evidence and must disclaim an opinion.
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