Auditing and Attestation- Certified Public Accountant (CPA) Practice Exam -

When would expressing a disclaimer of opinion be inappropriate for an auditor?

1. Management limits access to financial records

2. Failure to count physical inventory

3. Change in accounting principles without justification

4. Unable to obtain consolidated financial statements

The correct answer is: Change in accounting principles without justification

Expressing a disclaimer of opinion is generally used when an auditor cannot obtain sufficient appropriate audit evidence to form an opinion on the financial statements. Each scenario represents a different issue that an auditor might face. In the case of a change in accounting principles without justification, this would typically not lead to a disclaimer of opinion. Instead, it would raise concerns regarding the appropriateness and consistency of the financial statements. Auditors are required to evaluate the justification for any significant changes in accounting principles, as this impacts the reliability and integrity of the financial reporting. If a change is made without proper justification, the financial statements may not conform to generally accepted accounting principles (GAAP). In situations where management limits access to financial records, the auditor faces a restriction that may hinder the ability to gather sufficient appropriate evidence. Similarly, not counting physical inventory could lead to inability to confirm asset values but can often be addressed with alternative procedures. If consolidated financial statements cannot be obtained, this may also pose a significant audit risk but might involve alternative sources of information to mitigate the issue. Thus, the option regarding a change in accounting principles without justification would typically result in an adverse opinion rather than a disclaimer, making it the situation where a disclaimer of opinion would be inappropriate. Rather than indicating an