Limitations of an Audit Report
Limitation of scope arises when an auditor is not fashioned with sufficient information or explanations on certain elements of a financial record. Practices such as intentional withholding of information or destruction of records are major contributors of this (Taub, 2005). Under such circumstances, the auditor’s capabilities to produce an accurate opinion are crippled.
Auditing regulations provide that in any circumstance where the auditor is limited by client-imposed restrictions, the auditor should find it in his capacity to disclaim rather than give a qualified report of his opinion on the client’s economic status. However, when these limitations are as a result of causes beyond the client’s control, the auditor is advised to adhere to the generally accepted accounting principles (Messier, Glover, & Prawitt, 2017). Investors often rely on audit reports in their decision making for their intended ventures.
It is therefore in order to conclude that investors in most cases are misled. When an auditor generates a report out of financial data resulting from restricted access of a client’s record, disagreement between the client and auditor, destruction of records by catastrophes such as fire or floods or seizure of a client’s records by government, the audit report is destined to be inaccurate and hence an investment decision made out of such audit opinions have limited chances of success.