Which of the Following Circumstances Should Be Recognized as a Consistency

question 39

Multiple Choice

Which of the following circumstances should be recognized as a consistency modification in the auditor's report,whether or not the item is fully disclosed in the financial statements?

• A) A change in accounting estimate.
• B) A change from an unacceptable accounting principle to a generally accepted one.
• C) Correction of an error not involving a change in accounting principle.
• D) A change in classification.

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Definitions:

Labor Rate

The cost paid to labor per unit of time, often referred to as wage rate or hourly rate.

Production Capacity

The maximum output that a company can produce in a given period under normal conditions.