Auditing and Attestation - Certified Public Accountant (CPA) Practice Exam 2026 - Free CPA Practice Questions and Study Guide

A disclaimer of opinion is issued by an auditor in situations where they are unable to obtain sufficient appropriate audit evidence to draw a conclusion on the financial statements. This can occur due to various factors, such as limitations imposed by the client, lack of access to necessary information, or other circumstances that prevent a thorough audit.

When sufficient evidence cannot be gathered, the auditor cannot express an opinion on whether the financial statements are free from material misstatement. This emphasizes the auditor's inability to obtain enough information to form a reliable basis for an opinion. As a result, a disclaimer of opinion signals to users of the financial statements that the auditor's findings are not definitive due to the lack of evidence, rather than indicating that the statements are inherently misstated or that assumptions about accounting estimates are unreasonable.

Other scenarios, such as when financial statements are fairly presented or materially misstated, do not warrant a disclaimer. Instead, they would typically lead to an unmodified opinion or a qualified opinion respectively, depending on the nature and materiality of the issues present.