A Client Decides to Change Accounting Procedures for Certain Types

question 2

Multiple Choice

A client decides to change accounting procedures for certain types of transactions which have a material impact on the financial statements. The client adopts accounting treatment promulgated under GAAP. Prior to this, the client was not using GAAP; as part of the change the prior year financial statements are restated. The auditor should issue what type of opinion?

• A) Unqualified opinion.
• B) Qualified opinion.
• C) Adverse opinion.
• D) Depending on the circumstances, the auditor may choose any of the above.

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Definitions:

Physiological Activity

Processes and functions of living organisms, including human bodily functions such as breathing, digestion, and circulation.

Transvestite

An individual who dresses in clothing traditionally worn by the opposite sex, often for reasons related to self-expression or sexual preference; the term is considered outdated and may be replaced by terms like "cross-dresser."

Sexual Response

The physiological and emotional reactions of an individual to sexual stimuli, encompassing phases of arousal, plateau, orgasm, and resolution.

Sexual Response Cycle

A sequence of physical and emotional phases that occur when an individual becomes sexually aroused and engages in sexually stimulating activities.