Limitation of scope

A scope limitation is a restriction on an audit that caused by the client, issues beyond
the control of the client, or other events that do not allow the auditor to complete all
aspects of his or her audit procedures. Examples of events causing a scope limitation
are the disappearance of relevant evidentiary matter, and the client's restriction on
contact with customers to confirm the existence of accounts receivable.
A disclaimer of opinion
Statement by auditors that they do not express an opinion on the financial
position of a firm because (1) they have not completed an examination of
its accounts, or (2) the examination is not broad enough in scope to enable them
to form an opinion. See also adverse opinion and qualified opinion.
Also called auditor's disclaimer of opinion.


Pervasive a term used, in the context of misstatements, to
describe the effects on the financial report of
misstatements or the possible effects on the
financial report of misstatements, if any, that are
undetected due to an inability to obtain sufficient
appropriate audit evidence. Pervasive effects on
the financial report are those that, in the auditors
judgement:

(a) Are not confined to specific elements, accounts
or items of the financial report;

(b) If so confined, represent or could represent a
substantial proportion of the financial report; or

(c) In relation to disclosures, are fundamental to
users understanding of the financial report.

Disagreement
Auditors are required to tell management when control failures are exposing them to risk. Still,
many managers at some point disagree with their auditor's assessment. Can companies make
auditors revise their assessment? And if not, what's the best way to find common ground in those
disparate views?
In short, getting an auditor to revise an assessment does not require a "strategy," just facts. An
auditors function is to provide an independent and objective opinion on the activity, project,
subject, etc, thats "under review." If you can provide facts that support your viewpoint, the
auditors should adjust their opinion. If you cant provide the facts, you cannot expect the auditors
to change the report.
Disagreements are generally painfulawkward at best, disastrous at worst. Thus, you should
have two goals whenever you disagree with your auditor: (1) resolving the disagreement, and (2)
figuring out how to prevent disagreements in future audit cycles.
Most issues fall into one of two categories:
1. The auditor's assessment is wrong, in which case you should start gathering the facts and
arguments that will sway the auditor to your point of view
2. The auditor's assessment is basically accurate, but you don't agree its a problem or you
dont want the problem to appear on a report. In reality, this is the more common type of
manager/auditor disagreement. Unfortunately, it tends to spark less productive discussions,
since it challenges auditor judgment, not findings. A successful strategy for swaying auditor
opinion should focus on the report tone, item significance and recommended action plan.
An except-for opinion is expressed when the auditor concludes that either:
the possible effect of a limitation on the scope of the auditor s examination is,
or may be, material but is not so significant as to require a disclaimer of
opinion in which case the opinion is qualified by using the words except for
the effects of any adjustments that might have been found necessary had the
limitation not affected the evidence available to the auditor; or
the effect of the treatment or disclosure of a matter with which the auditor
disagrees is, or may be, material but is not, in the auditors judgement, so
significant as to require an adverse opinion in which case the opinion is
qualified by using the words except for the effects of the matter giving rise to
the disagreement.

Emphasis of matter is a type of paragraph in, or section of, an auditors' report on financial
statements. Such a paragraph is added to indicate a significant uncertainty or other matter, which
is disclosed appropriately in the notes forming part of the financial statements, but which the
auditor considers is significant or important enough to warrant a mention in their report.
An emphasis of matter paragraph does not qualify the auditors' opinion; in fact, such paragraphs
typically begin by stating Without qualifying our report....
Under the framework of the International Standards on Auditing (ISA), the emphasis of matter
paragraph / section is placed after the opinion paragraph (and, consequently, towards the end of
the report), in the auditor's report.