In which of the following circumstances may auditors issue the standard (unmodified) report on the entity's financial statements?
A)The entity changed accounting principles having an immaterial effect on the entity's financial position, results of operations, and cash flows.
B)The auditors wish to emphasize a matter regarding the financial statements.
C)The auditors reference component auditors who examined a subsidiary of group financial statements.
D)The auditors have not been able to audit a substantial portion of the balance sheet because of a circumstance-imposed scope limitation.

Question

Quizplus · Accepted Answer

If the entity changed accounting principles but the effect was immaterial on the financial position, results of operations, and cash flows, auditors may issue an unmodified report. This is because the financial statements presented fairly, in all material respects the entity's financial position, results of operations, and cash flows in accordance with generally accepted accounting principles.

In Which of the Following Circumstances May Auditors Issue the Standard