If Management Fails to Provide Adequate Justification for a Change

question 25

Multiple Choice

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

• A) Add an additional paragraph and express a qualified or an adverse opinion on the entity's financial statements 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 a separate explanatory paragraph but not modify the opinion paragraph on the entity's financial statements.
• D) Neither modify the opinion on the entity's financial statements nor disclose the matter because both principles are generally accepted accounting principles.

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Definitions:

Redness

A condition characterized by the reddening of the skin or other body parts, often indicating inflammation or irritation.

Contusion

A closed wound, or bruise.

Abrasion

A superficial wound caused by scraping or rubbing the skin against a rough surface, resulting in the removal of the upper skin layers.

Laceration

A jagged, open wound in the skin that can extend down into the underlying tissue.