When an Auditor Is Trying to Determine How Changes Can

question 31

Multiple Choice

When an auditor is trying to determine how changes can affect consistency and/or compatibility, he should keep in mind that:

• A) changes that affect comparability but not consistency require an explanatory paragraph.
• B) items that materially affect the comparability of financial statements requires a disclaimer of opinion.
• C) changes that affect consistency require an explanatory paragraph if they are material.
• D) changes that involved comparability or consistency only need to be mentioned in the footnotes.

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Definitions:

Resilience

The ability to recover quickly from difficulties or adapt in the face of adversity, stress, or tragedy.

Impulses

Rapid, often subconscious, responses to internal or external stimuli.

Emotions

Complex psychological states that involve a subjective experience, a physiological response, and a behavioral or expressive response.

Interpretation

The process of explaining or understanding the meaning of something, such as a text, phenomenon, or event.