A scope limitation arises when an auditor cannot obtain enough audit evidence to form an opinion regarding a client’s financial statements. This situation can also arise when a client does not allow the auditor to perform an audit procedure needed to form an opinion.

Scope limitations affect the ability of an auditor to render a clean opinion on the financial statements of a client. This can sometimes be avoided when the auditor uses alternative procedures.

Types of Scope Limitations

There are several types of scope limitations on an audit. They are as follows:

Outside circumstances. There may be issues beyond the control of the client that trigger a scope limitation. For example, several key accounting staff may have been called away to deal with the integration of an acquisition, and are not available to answer auditor questions. Or, a client’s accounting records were destroyed by a flood.
Caused by the client. The client may have imposed a restriction on the audit. For example, a client restricts the auditor’s access to its customers to confirm the existence of accounts receivable.