The Rotter Company Changed Accounting Principles in 20X4 from Those

question 26

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 the basis for a 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 a modification paragraph since the reason therefore since that reason will be included in the notes to the statements.

Examine the role of stigma and societal responses in the process of deviance.

Understand the concept and importance of a lifespan approach in psychology.

Grasp the basic principles of behaviorist perspective, including reinforcement and punishment.

Comprehend the broad domains of development: perceptual, cognitive, moral, social, motor, and physical.

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Definitions:

Par Value

The face value of a bond or stock as stated by the issuer, not necessarily its market value.

Transaction Fee

A charge assessed for processing a financial transaction, commonly found in banking and brokerage services.

Gain Or Loss

The financial result of selling an asset or investment for more or less than its purchase price, respectively.

Rate Of Yield

From an investment in stock, the ratio of the dividend to the total cost of the stock.