Types of Audit Opinions

question 16

Essay

Types of Audit Opinions.
A CPA has completed an audit of the financial statements of a long-haul trucking company for the year ended December 31, 2014. Prior to 2014, the company depreciated its trucks over 10 years. However, during 2014, the company determined that a more realistic estimated life for its trucks was 8 years and computed the 2014 depreciation on the basis of the revised estimate. The CPA is satisfied that the 8 year estimate is reasonable, but the change will have a material effect on the comparability of the company's financial statements. The company adequately disclosed the change in estimated useful lives of its trucks and the effect of the change on 2014 income in a note to the financial statements.
REQUIRED:
Which type of audit report would you suggest be issued on the 2014 financial statements and why?

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Definitions:

Kerner Report

A report released in 1968 by the National Advisory Commission on Civil Disorders that identified racism and social inequality as the primary causes of urban riots.

Urban Riots

Violent disturbances or upheavals that occur in urban areas, often as a result of social grievances or tensions.

White Racism

Discriminatory beliefs and practices that privilege white individuals over people of other racial backgrounds, often institutionalized within societal structures.

Doves

In political terms, individuals or policies that prefer negotiation and peaceful solutions over conflict and war.