When a client’s financial statements contain a material departure from an FASB Statementon Accounting Standards and the public accounting firm believes the departure is necessaryto ensure that the statements are not misleading,a. The public accounting firm must qualify the auditors’ report for a departure from GAAP.b. The public accounting firm can explain why the departure is necessary and then give anunmodified opinion paragraph in the auditors’ report.c. The public accounting firm must give an adverse auditors’ report.d. The public accounting firm can give the standard unmodified auditors’ report with anunmodified opinion paragraph
When a client’s financial statements contain a material departure from an FASB Statementon Accounting Standards and the public accounting firm believes the departure is necessaryto ensure that the statements are not misleading,a. The public accounting firm must qualify the auditors’ report for a departure from GAAP.b. The public accounting firm can explain why the departure is necessary and then give anunmodified opinion paragraph in the auditors’ report.c. The public accounting firm must give an adverse auditors’ report.d. The public accounting firm can give the standard unmodified auditors’ report with anunmodified opinion paragraph
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
When a client’s financial statements contain a material departure from an FASB Statement
on Accounting Standards and the public accounting firm believes the departure is necessary
to ensure that the statements are not misleading,
a. The public accounting firm must qualify the auditors’ report for a departure from GAAP.
b. The public accounting firm can explain why the departure is necessary and then give an
unmodified opinion paragraph in the auditors’ report.
c. The public accounting firm must give an adverse auditors’ report.
d. The public accounting firm can give the standard unmodified auditors’ report with an
unmodified opinion paragraph
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