When There Has Been a Change in Accounting Principles but Its

question 13

Multiple Choice

When there has been a change in accounting principles but its effect on the comparability of the financial statements is not material,the auditors 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 report.
• D) Refer to the change in the opinion paragraph.

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Definitions:

Statement of Cash Flows

A financial report that provides aggregate data regarding all cash inflows and outflows a company receives from its ongoing operations, investment, and financing activities.

Balance Sheets

Financial statements that summarize a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial condition.

Fraudulent and Unfair Behavior

Involves deceitful practices or dishonest actions against the principles of justice, equity, or rightful dealings.

Sales Practice Abuses

Unethical or illegal business practices related to the selling of securities, often involving misleading information or high-pressure sales tactics.