A scope limitation is a restriction on the applicability of an

auditor's report An auditor's report is a formal opinion, or disclaimer thereof, issued by either an internal auditor or an independent external auditor as a result of an internal or external audit, as an assurance services, assurance service in order for the use ...

that may arise from the inability to obtain sufficient appropriate evidence about a component in the financial statements. When all the audit procedures that are considered necessary, either by circumstances, engagement, or client limitation, the audit is limited in scope. Auditing standards suggest that when restrictions imposed by the client significantly limit the scope of the engagement the auditor should consider disclaiming the opinion. Some scope limitations arise for reasons that are beyond the control of the client, such as

fire Fire is the rapid oxidation of a fuel in the exothermic chemical process of combustion, releasing heat, light, and various reaction Product (chemistry), products. Flames, the most visible portion of the fire, are produced in the combustion re ...

and

flood A flood is an overflow of water (list of non-water floods, or rarely other fluids) that submerges land that is usually dry. In the sense of "flowing water", the word may also be applied to the inflow of the tide. Floods are of significant con ...

. Alternative procedures can overcome the risk of the auditor's qualified or disclaimer opinion. Simple procedures to provide sufficient evidence would be necessary for the auditor to adhere to

US GAAP Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC), and is the default accounting standard used by companies based in the United States. The Financial Accountin ...

Examples of limitations

*End of period inventory count limited, because the auditor is not engaged until after the end of the period. *client's restriction on contact with customers to confirm the existence of accounts receivable. * Disappearance of relevant evidentiary matter The scope limitation should be described before the opinion or disclaimer paragraph. Auditing terms United States Generally Accepted Accounting Principles {{economics-stub