Auditing and Assurance Standards and Guidance

Auditing Standards (Ireland)

FRC ISAs (UK and Ireland) applicable for periods beginning on or after 15 December 2010 but before 17 June 2016

ISA (UK and Ireland) 705 Modifications to the opinion in the independent auditors report

ISA (UK and Ireland) 705 applicable in the UK for periods ending on or after 15 December 2010 (UK only)
Requirements
Determining the Type of Modification to the Auditor's Opinion
Consequence of an Inability to Obtain Sufficient Appropriate Audit Evidence Due to a Management-Imposed Limitation after the Auditor Has Accepted the Engagement
11.If, after accepting the engagement, the auditor becomes aware that management has imposed a limitation on the scope of the audit that the auditor considers likely to result in the need to express a qualified opinion or to disclaim an opinion on the financial statements, the auditor shall request that management remove the limitation.
12.If management refuses to remove the limitation referred to in paragraph 11, the auditor shall communicate the matter to those charged with governance, unless all of those charged with governance are involved in managing the entity,2 and determine whether it is possible to perform alternative procedures to obtain sufficient appropriate audit evidence.
13.If the auditor is unable to obtain sufficient appropriate audit evidence, the auditor shall determine the implications as follows:
 (a)If the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be material but not pervasive, the auditor shall qualify the opinion; or
 (b)If the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive so that a qualification of the opinion would be inadequate to communicate the gravity of the situation, the auditor shall:
  (i)Withdraw from the audit, where practicable and possible under applicable law or regulation; or (Ref: Para. A13-A14)
  (ii)If withdrawal from the audit before issuing the auditor's report is not practicable or possible, disclaim an opinion on the financial statements.
14.If the auditor withdraws as contemplated by paragraph 13(b)(i), before withdrawing, the auditor shall communicate to those charged with governance any matters regarding misstatements identified during the audit that would have given rise to a modification of the opinion. (Ref: Para. A15 – A15-1)
2 ISA (UK and Ireland) 260, "Communication with Those Charged with Governance," paragraph 13.
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