When There Has Been a Change in Accounting Principles, but the Effect

question 249

Multiple Choice

When there has been a change in accounting principles, but the effect of the change on the comparability of the financial statements is not material, the auditor should:

• A) Refer to the change in an explanatory paragraph.
• B) Explicitly concur that the change is preferred.
• C) Not refer to consistency in the auditor's report.
• D) Refer to the change in the opinion paragraph.

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Definitions:

Preoperational Thought

A stage in Piaget’s theory of cognitive development where children (ages 2-7) are able to engage in symbolic play and make intuitive guesses, but their thinking is not yet logical.

Intuitive Thought

A form of thinking that relies on a direct and immediate understanding or perception of situations, independent of conscious reasoning processes.

Secondary Circular Reactions

A stage in Piaget's theory of cognitive development where infants from 4 to 8 months discover and repeat actions by chance through their own bodies.

Internalization

The process by which individuals incorporate external standards, values, and norms into their own belief system, making those external influences a part of their internal psyche.