Choice "b" is correct. When a qualified opinion is issued due to a lack of sufficient audit evidence, the
lack of evidence should be disclosed in an explanatory paragraph before the opinion paragraph.
Since insufficient evidence is a scope limitation, the scope paragraph should also be modified to refer
to the limitation and to the explanatory paragraph that discusses it.
Choices "a" and "c" are incorrect. Management (and not the auditor) prepares the notes to the
financial statements. The auditor therefore would not refer to this (or any other) situation in the
notes to the financial statements.
Choice "d" is incorrect. The auditor does refer to the situation in the scope paragraph.
