AU-C Section 210.07: Management-Imposed Scope Limitation

AU-C Section 210.07 says:

"If management or those charged with governance of an entity that is not required by law or regulation to have an audit impose a limitation on the scope of the auditor's work in the terms of a proposed audit engagement, such that the auditor believes the limitation will result in the auditor disclaiming an opinion on the financial statements as a whole, the auditor should not accept such a limited engagement as an audit engagement. If management or those charged with governance of an entity that is required by law or regulation to have an audit imposes such a scope limitation and a disclaimer of opinion is acceptable under the applicable law or to the regulator, the auditor is permitted, but not required, to accept the engagement."

As such, if the Auditor expects to disclaim an opinion on the audit, there is no use accepting the audit in the first place.  Some scope limitations that would not preclude the Auditor from accepting the engagement include:

• a management-imposed restriction that results in only a qualified opinion (i.e., not a disclaimer)
• a restriction beyond management's control

Audits of employee benefit plans are those that require a disclaimer of opinion due to a scope limitation, but the law/regulation requires them and accepts them.  As such, the Auditor can decide whether or not to accept this type of engagement.

https://www.aicpa.org/content/dam/aicpa/research/standards/auditattest/downloadabledocuments/au-c-00210.pdf