A Company Has Changed Its Method of Inventory Valuation from an Unacceptable

question 9

Multiple Choice

A company has changed its method of inventory valuation from an unacceptable one to one that complies with ASPE (Accounting Standards for Private Enterprises) .The auditor's report on the financial statements of the year of the change should include

• A)no reference to the item assuming that the change has been properly disclosed.
• B)a reference to a change in accounting principles in the opinion paragraph.
• C)an explanatory paragraph explaining the change.
• D)a justification for making the change and the impact of the change on reported net income.

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Definitions:

Meritocratic Values

A system of governance or organizational management where appointments and responsibilities are accorded based on individual abilities and merit rather than on the basis of class privilege, nepotism, or favoritism.

Interdependent Task Approaches

Strategies or methods where the completion of tasks requires the collaborative effort of multiple people or teams, relying on each other's input and cooperation.

Faultline

Describes hypothetical dividing lines that can split a group into subgroups based on one or more attributes, such as age, gender, or experience, potentially affecting group cohesion.

Demographic Characteristics

Demographic Characteristics are the statistical data of a population, including factors like age, race, gender, income, education, and employment, which are used for analysis and policy-making.