For Each of the Following Situations,indicate by Letter the Type

question 103

Short Answer

For each of the following situations,indicate by letter the type of report most likely to be issued.
A.Unqualified opinion,no modification.
B.Unqualified opinion,explanatory paragraph for consistency.
C.Unqualified opinion,explanatory paragraph for Rule 203.
D.Unqualified opinion,explanatory paragraph for emphasis of a matter.
E.Unqualified opinion,explanatory paragraph for a going-concern uncertainty.
F.Qualified opinion.
G.Disclaimer of opinion
____ 1.The entity has a lawsuit pending against it.There is significant uncertainty about the outcome of the lawsuit,which could have a highly material impact on the viability of the entity.Management has provided adequate disclosure of the lawsuit in the footnotes accompanying the financial statements.
____ 2.The entity has a lawsuit pending against it and it is probable that the entity will lose the suit.Management has accrued the best estimate of the loss and provided adequate disclosure.It is not expected that this lawsuit will have a significant effect on the entity's ability to continue as a going concern.
____ 3.The entity has a lawsuit pending against it and it is probable that the entity will lose the suit.Management has not accrued the best estimate of the loss but has provided information in the footnotes.It is not expected that this lawsuit will have a significant effect on the entity's ability to continue as a going concern.
____ 4.Based on recent analysis of usage,the entity has changed the useful life of its office equipment from five to four years.This change is reflected in the depreciation amounts computed for the current year.
____ 5.The entity uses an accounting principle for a class of transactions that is not acceptable under current GAAP.The entity believes and the auditors concur that the financial statements would be misleading if GAAP were to be followed.

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Definitions:

Strategies

Plans of action or policies designed to achieve a major or overall aim.

Critical Listening

The skill of listening with the intent to analyze and evaluate the content of the communication for decision making or problem-solving.

Benefits

Advantages or perks provided beyond wages or salary, such as health insurance, paid time off, or retirement plans, usually by an employer to employees.

Example

A representative form, part, or instance that serves to illustrate a principle, theme, or method.