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:

Semantic Memory

A category of persistent memory that involves the ability to memorize words, ideas, or numbers, indispensable for the mastery and implementation of language.

General Knowledge

Broad, useful information and facts about a wide range of topics rather than detailed knowledge in a specific area.

Long-Term Memory

The phase or type of memory responsible for the storage of information over an extended period, potentially as long as a lifetime.

Curve Of Forgetting

A graph that illustrates the decline of memory retention over time, where information is lost exponentially if no effort is made to retain it.