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:

Potential Biases

Refers to the possibility of prejudice or partiality that can affect judgement or decision-making processes.

Personality

A combination of emotional, attitudinal, and behavioral response patterns of an individual.

Carl Jung

Swiss psychiatrist and psychoanalyst who founded analytical psychology.

Perceivers

Individuals who observe and interpret stimuli from their environment, affecting their understanding and interactions with the world.