Question

As a result of management's refusal to permit the auditor to physically examine inventory, the auditor...

As a result of management's refusal to permit the auditor to physically examine inventory, the auditor must depart from the unmodified opinion audit report because

the financial statements have not been prepared in accordance with GAAP.

the scope of the audit has been restricted by circumstances beyond either the client's or auditor's control.

the financial statements have not been audited in accordance with GAAS.

the scope of the audit has been restricted.
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Answer #1
The auditor must depart from the unmodified opinion audit report because the scope of the audit has been restricted.
The auditor must always physically examine inventory and the management must make necessary arrangements for the auditor to carry out such examination.
In case of management's refusal to permit the auditor to physically examine inventory,the auditor must state in his audit report that the scope of the audit has been restricted.
Option D is correct
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