The Audit of Liverpool Plc Had Been Completed and the Audit

question 36

Multiple Choice

The audit of Liverpool Plc had been completed and the audit senior for the engagement prepared items for discussion.He argues that the following list of accounting changes violate the consistency qualitative characteristic of accounting information.As audit manager,which of the following items do you think are worthy of discussion with the audit partner?

• A)After five years of using straight-line depreciation for reporting purposes and accelerated depreciation for tax purposes, the entity decided to adopt accelerated depreciation for reporting purposes.
• B)The company uses an inventory valuation method that is different from the method used by other companies in the industry.
• C)The estimated remaining useful life of an asset was reduced due to the increase in volume of use of the asset.
• D)The company disposed of a subsidiary that had been included in the financial reports in prior years.

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Definitions:

SUDs

Stands for Substance Use Disorders, a condition characterized by the uncontrollable use of substances despite harmful consequences.

DSM-IV

Stands for Diagnostic and Statistical Manual of Mental Disorders, Fourth Edition, a handbook used by healthcare professionals as an authoritative guide to the diagnosis of mental disorders.

Less Severe Disorder

A disorder characterized by symptoms that are of lower intensity, causing less impairment than more severe forms of the disorder.

Same Risk Factor

A component or condition that increases the likelihood of developing a disease or injury, shared across different contexts or populations.