A client decides to change accounting procedures for certain types of transactions which have a material impact on the financial statements. The client adopts accounting treatment promulgated under GAAP. Prior to this, the client was not using GAAP; as part of the change the prior year financial statements are restated. The auditor should issue what type of opinion?
A) Unqualified opinion.
B) Qualified opinion.
C) Adverse opinion.
D) Depending on the circumstances, the auditor may choose any of the above.

Question

Quizplus · Accepted Answer

The client has adopted accounting treatment promulgated under GAAP and restated the prior year financial statements. This means that the financial statements present fairly, in all material respects, the financial position, results of operations, and cash flows in accordance with GAAP. As a result, the auditor should issue an unqualified opinion.

A Client Decides to Change Accounting Procedures for Certain Types