If management fails to provide adequate justification for a change from one generally accepted accounting principle to another, the auditors should
A)Modify the Opinion Section and Basis for Opinion Section of the report for lack of conformity with generally accepted accounting principles.
B)disclaim an opinion on the entity's financial statements because of uncertainty.
C)disclose the matter in an emphasis-of-matter paragraph but not modify the Opinion Section of the report.
D)Not modify the report because both principles are generally accepted accounting principles.

Question

Quizplus · Accepted Answer

If management fails to provide adequate justification for a change from one generally accepted accounting principle to another, the auditors should modify the Opinion Section and Basis for Opinion Section of the report for lack of conformity with generally accepted accounting principles. This is because the financial statements do not comply with GAAP and therefore the auditor cannot express an unqualified opinion.

If Management Fails to Provide Adequate Justification for a Change