A client decides to change accounting procedures for certain types of transactions which have a material impact on the financial statements. The client changes from the LIFO method of inventory valuation to the FIFO method without justification. The auditor should issue what type of opinion?
A) Adverse opinion.
B) Disclaimer of opinion.
C) Qualified opinion.
D) Depending on the circumstances, the auditor may choose either "a" or "c" above.

Question

Quizplus · Accepted Answer

Changing accounting procedures without justification, especially when it has a material impact on the financial statements, may lead to either a qualified opinion if the impact is limited and can be isolated, or an adverse opinion if the change pervades the financial statements as a whole, misleading the financial position or results of operations.

A Client Decides to Change Accounting Procedures for Certain Types