If Management Fails to Provide Adequate Justification for a Change

question 4

Multiple Choice

If management fails to provide adequate justification for a change from one generally accepted accounting principle to another, the auditors should

• A)Modify the Opinion Section and Basis for Opinion Section of the report for lack of conformity with generally accepted accounting principles.
• B)disclaim an opinion on the entity's financial statements because of uncertainty.
• C)disclose the matter in an emphasis-of-matter paragraph but not modify the Opinion Section of the report.
• D)Not modify the report because both principles are generally accepted accounting principles.

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Definitions:

Marginal Revenue

The extra revenue earned by selling an additional unit of a product or service.

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded by consumers, typically downward-sloping.

Marginal Revenue

The additional income earned by producing and selling one more unit of a product or service.

Marginal Revenue

The additional revenue that a firm receives from selling one more unit of a good or service.