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

In a situation where sufficient evidence cannot be gathered, what is the auditor’s stance regarding current year’s financial results?

1. Express a modified opinion

2. No opinion can be expressed on those results

3. Issue a disclaimer of opinion

4. Continue with the current audit as usual

The correct answer is: No opinion can be expressed on those results

When an auditor encounters a situation where sufficient appropriate audit evidence cannot be obtained regarding certain aspects of an entity's financial statements, the auditor must evaluate the implication of this limitation on the audit opinion. If the auditor is unable to gather evidence to form a basis for their opinion on the financial statements, they are required to communicate this limitation in the audit report. In such cases, no opinion can be expressed on the financial results because the auditor lacks the necessary evidence to support a conclusion about whether the financial statements are free of material misstatement. This is a critical aspect of the auditing process, as the integrity and reliability of financial reporting depend on sufficient evidence being available to support the auditor’s findings and conclusions. Therefore, when it is determined that adequate evidence cannot be obtained, the appropriate action is to not express an opinion on those financial results. The other answer choices are related to different circumstances: a modified opinion would typically be expressed when there is a limitation but sufficient evidence has been obtained overall, a disclaimer of opinion may suggest that there are pervasive issues preventing a report altogether, and continuing with the audit as usual would not address the lack of evidence appropriately. Thus, stating that no opinion can be expressed reflects the auditor's responsibility to ensure that stakeholders receive accurate