The Rotter Company Changed Accounting Principles in 20X4 from Those

question 49

Multiple Choice

The Rotter Company changed accounting principles in 20X4 from those followed in 20X3.The auditor believes that the new principles are not in conformity with GAAP,and therefore that the 20X4 financial statements are misleading due to pervasive misstatements.The change (including its dollar effect) has been described in the notes to the 20X4 statements,which are being presented by themselves.Under these circumstances,in reporting on the 20X4 financial statements,the auditor should:

• A)Express an adverse opinion with a basis for modification paragraph disclosing the reason (the accounting change) for the opinion.
• B)Express an unmodified opinion with an emphasis-of-matter paragraph and disclose the accounting change from 20X3 and its effect on the financial statements.
• C)Disclaim an opinion and explain all of the reasons therefore.
• D)Express an adverse opinion regarding the 20X4 financial statements, without a basis for modification paragraph since the reason therefore since that reason will be included in the notes to the statements.

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Definitions:

Cerebral Cortex

The cerebral cortex is the outer layer of the brain, involved in high-level brain functions such as thought, language, and consciousness.

Corpus Callosum

The corpus callosum is a wide band of nerve fibers connecting the left and right hemispheres of the brain, facilitating interhemispheric communication.

Communicate

The act of conveying information, feelings, or thoughts from one individual or group to another through various means, including verbal, non-verbal, or written channels.

Corpus Callosum

A thick band of nerve fibers that divides the cerebral cortex lobes into left and right hemispheres, facilitating communication between the two halves.