For which of the following events would an auditor issue a report that does not make any reference to consistency Select one: a. Management’s lack of reasonable justification for a change in accounting principle b. A change in the useful life used to calculate the provision for depreciation expense c. A change in the method of accounting for inventories d. A change from an accounting principle that is not generally accepted to one that is generally accepted

For which of the following events would an auditor issue a report that does not make any reference to consistency Select one: a. Management’s lack of reasonable justification for a change in accounting principle b. A change in the useful life used to calculate the provision for depreciation expense c. A change in the method of accounting for inventories d. A change from an accounting principle that is not generally accepted to one that is generally accepted

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter15: Audit Reports For Financial Statement Audits

Section: Chapter Questions

Problem 11CYBK

See similar textbooks

Similar questions

The preliminary judgement about materiality is the ______________ amount by which the auditor believes the statements could be misstated and still not affect the economic decisions of users. The missing word in this sentence is: a. Average b. Minimum c. Maximum d. Median
When it is difficult to distinguish a change in accounting policy from achange in an accounting estimate, the change is treated as A. Change in accounting estimate with appropriate disclosureB. Change in accounting policyC. Correction of an errorD. Initial adoption of an accounting policy
Because of inadequate records the auditor is uncertain as to whether the company’s major investment is recorded at the correct cost. The auditor should issue a/an: A. Unqualified opinion with explanatory paragraphB. Qualified opinionC. Adverse opinionD. Disclaimer opinion
Why is retrospective treatment of changes in accounting estimatedprohibited? A. Changes in estimate are normally corrections and adjustments which are the natural result of the accounting process B. The retrospective treatment for any type of presentation is not allowed C. Retrospective treatment of changes in accounting estimate is required by IFRS D. The IFRS is silent on the issue
Which type of audit report specifies that financial statements do not present fairly the financial position, results of operations, and cash flows in conformity with accounting standards? A. Qualified report B. Adverse report C. Unqualified report D. Disclaimer of opinion
Which case below is not one of the examples of changes that affect consistency and require an explanatory paragraph, if material A. Changes in reporting entities B. Corrections of accounting principle errors C. Changes in accounting principles D. Scope limitations
When it is difficult to distinguish between a change in accounting estimate and a change in accounting policy, the change is treated as: a. Change in accounting estimate with appropriate disclosure b. Change in accounting policy c. Correction of error d. Change in accounting estimate with no appropriate disclosure
Explain the concept of hindsight in relation to changes in accounting estimates and errors. How should the use of hindsight be balanced with the requirement to make estimates based on information available at the time?
Departures from GAAP. For each of the following departures from GAAP, indicate thetype of opinion that the auditors would issue as well as any modifications that would bemade to the standard (unmodified) report.a. A departure that had an immaterial effect on the financial statements.b. A departure that had a material effect on the financial statements (this effect was notpervasive and affected only one account).c. A departure that had a material effect on the financial statements and was pervasive(affected a number of accounts on both the balance sheet and income statement).
Discuss how a change in accounting policy is handled when it is impractical to ascertain earlier values due to unforeseen circumstances.
A change in accounting principle requires a modification of the wording standard unqualified audit report. * O True False
From the options given below which of the following is not the reason of inherent limitation of audit? a. Limitation in accounting system O b. Use of human judgment O c. Poor planning O d. Human errors