change to affect comparability but not consistency? accounting change can affect comparability but not consistency because underlying data can change without accounting principles being changed. You just studied 15 terms!
When there has been a change in accounting principle that materially affects the comparability?
When there has been a change in accounting principle that materially affects the comparability of the comparative financial statements presented and the auditor concurs with the change, the auditor should: Choice “b” is correct.
Which of the following would be considered a change that affects comparability?
4. A change in accounting estimate is an example of an accounting change that affects comparability and requires an explanatory/emphasis-of-matter paragraph in the audit report.
When comparative financial statements are presented the auditor’s report should be considered to apply to the financial statements of the?
When comparative financial statements are presented, the auditor’s report should be considered to apply to the financial statements of the: A) periods presented plus the one preceding period .
For which of the following events would an auditor issue a report that does not include any reference to comparability consistency?
For which of the following events would an auditor issue a report that does not include any reference to comparability? A change in the service life used to calculate depreciation expense.
Does the audit opinion extend to the other information?
The auditor’s opinion on the financial statements does not cover the other information , nor does this ISA require the auditor to obtain audit evidence beyond that required to form an opinion on the financial statements. ... Other information may also include other matters.
Which of the following is an example of a compliance audit?
Which of the following is an example of a compliance audit? An audit of financial statements . An audit of a company’s policies and procedures for adhering to environmental laws and regulations.
Which of the following steps should an auditor perform first to determine the existence?
Which of the following steps should an auditor perform first to determine the existence of related parties? Inquire about the existence of related parties from management.
In which of the following situations would Auditors ordinarily choose between expressing a qualified opinion or an adverse opinion on the entity’s financial statements?
If the auditor concludes that management’s estimate is unreasonable and that its effect is to cause the financial statements to be materially misstated , the auditor should express a qualified or an adverse opinion.
Where does other matter paragraph go?
— When it is relevant to all the auditor’s responsibilities or to users’ understanding of the auditor’s report, the other- matter paragraph may be included as a separate section following the sections “Report on the Audit of the Financial Statements” and “Report on Other Legal and Regulatory Requirements.”
Who is the most important user of an auditor’s report on a company’s financial statements?
The auditor’s report is a document containing the auditor’s opinion on whether a company’s financial statements comply with GAAP and are free from material misstatement. The audit report is important because banks, creditors, and regulators require an audit of a company’s financial statements.
What is the auditor’s primary basis for the expression of an opinion on the financial statements?
The auditor’s primary basis for the expression of an opinion on the financial statements are the conclusions being drawn from the audit evidence that has been reviewed and assessed.
Is are responsible for the financial statements?
Who Prepares a Company’s Financial Statements? A company’s management has the responsibility for preparing the company’s financial statements and related disclosures. The company’s outside, independent auditor then subjects the financial statements and disclosures to an audit.
What is GAAP application quality?
The Qualities of GAAP
When financial statements are prepared under GAAP, they are based on standards developed by a robust, open due process that results in information that is: Relevant, representationally faithful, and reflective of economics . Comparable with other organizations or governments .
Which GAAP principle is applicable?
Principle of Regularity : GAAP-compliant accountants strictly adhere to established rules and regulations. Principle of Consistency: Consistent standards are applied throughout the financial reporting process. Principle of Sincerity: GAAP-compliant accountants are committed to accuracy and impartiality.
What is a change in accounting principle?
A change in accounting principle is the term used when a business selects between different generally accepted accounting principles or changes the method with which a principle is applied . ... Changing an accounting principle is different from changing an accounting estimate or reporting entity.
