ACCA Advanced Audit and Assurance (AAA) Practice Exam

What must occur when an auditor cannot obtain sufficient appropriate audit evidence?

1. An unqualified opinion must be given

2. A disclaimer of opinion must be issued

3. A clean opinion is expressed

4. Satisfactory evidence must be obtained

The correct answer is: A disclaimer of opinion must be issued

When an auditor is unable to obtain sufficient appropriate audit evidence, the appropriate response is to issue a disclaimer of opinion. This situation arises because a lack of sufficient evidence means the auditor cannot form a reliable conclusion about the financial statements. A disclaimer of opinion indicates that the auditor does not express an opinion on the financial statements due to the inability to gather the necessary evidence, which is critical for assessing whether the statements are free from material misstatement. This is particularly relevant when uncertainties exist or when limitations are imposed on the scope of the audit. In contrast, issuing an unqualified opinion or a clean opinion implies that the auditor has sufficient evidence to support their favorable view of the financial statements. However, when evidence is lacking, such conclusions cannot be justifiably made. Therefore, rather than provide a potentially misleading positive opinion, the auditor must reflect the limitations of their audit in the form of a disclaimer, highlighting the inherent uncertainties in the financial statements.