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Post details: Sarbanes Oxley Audit Scope Limitations 404
07/01/06
Sarbanes Oxley Audit Scope Limitations 404
Over the past few months, I have been trying to throw more light on the overall Sarbanes Oxley compliance process. Today, I am talking from the point of view of the auditor attesting a company's financial statements. What protocol should the auditor follow in case of a scope limitation in a sarbanes oxley engagement. Due to circumstances,
an auditor may face restictions in scope, in which case he has the following options:
1. Withdraw from the Enagegement
2. Disclaim an opinion
3. Express a qualified opinion
The auditor in deciding which course of action to take should assess the importance of the ommitted to his ability to form an opinion on management's assessment of internal control. The auditor should also bear in mind his opinion on the effectiveness of company's internal control over financial reporting while deciding the appropriate action in scope limitation cases.
From my personal experience, I know that scope limitation cases occur very rarely. But in case as an auditor you do find limitations imposed by management, my advise would be to withdraw from the engagement or
disclaim his opinion. I would also recommend a through reading of Auditing Standard 2 for auditors faced with scope limitations in Sarbanes Oxley audits. Watch out this space for more on SOX audit scope limitations!
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