[G3]

I am working through my NINJA notes and WTB and am getting confused regarding consistency.

In the Notes it says that consistency is NOT violated by 1) reclassifications 2) prospective treatment of a new principle 3) accounting errors 4) accounting estimate change

This should result in an unqualified opinion

In WTB it lists consistency should be referred to in the opinion paragraph due to 1) change in entity 2) change in principle 3) corrections or errors 4) change in principle inseperable from a change in estimate

This should result in an unqualified opinion with an explanatory paragraph

What’s getting me confused is the difference between each lists 2) and 3) and when each is appropriate (what’s the difference between a prospective treatment or a principle and a principle change? or why do I refer to a change in error but not an error itself? )

Any help to clear up this confusion would be greatly appreciated 🙂

3XBEC:75 * 4XREG:82 * 4XFAR:76 * 7XAUD:77

“It is hard to fail, but it is worse never to have tried to succeed.” Theodore Roosevelt

[G3]

For some reason I am having difficulty with this aspect of the auditing reports section. Any assistance to clear up the confusion would be great 🙂

3XBEC:75 * 4XREG:82 * 4XFAR:76 * 7XAUD:77

“It is hard to fail, but it is worse never to have tried to succeed.” Theodore Roosevelt

[G3]

For some reason I am having difficulty with this aspect of the auditing reports section. Any assistance to clear up the confusion would be great 🙂

3XBEC:75 * 4XREG:82 * 4XFAR:76 * 7XAUD:77

“It is hard to fail, but it is worse never to have tried to succeed.” Theodore Roosevelt

[Determined CPA]

This is something I'd like better understanding of as well.

A - 75
B - 78 God is good.
F - 77 Answered prayers.
R - 84! Done!!

Paperwork sent - waiting for license!!
Still on a cloud and in shock. Through God, all things will happen.

[Determined CPA]

This is something I'd like better understanding of as well.

A - 75
B - 78 God is good.
F - 77 Answered prayers.
R - 84! Done!!

Paperwork sent - waiting for license!!
Still on a cloud and in shock. Through God, all things will happen.

[stoleway]

Ok this is my understanding of this concept.

Do not make mention of the following in the opinion paragraph

1.Classification (unless the classification involves principle or departure from GAAP)

2.prospective treatment of a new principle ( I understand prospective as something that is being contemplated or anticipated in the future)….this anticipation does not have any precedence on current events

3.accounting errors that are not material

4. Estimates eg.changes in depreciation, amortization and depletion methods are treated as changes in accounting estimates. changes in percentages for bad debt expense or warranties, changes in salvage value or estimated useful life for depreciable assets

Make reference to the following in the opinion paragraph

1) change in reporting entity eg from single company to consolidated

2) change in accounting principle eg. any change from one GAAP to another GAAP

Changes in inventory flow method (FIFO, LIFO, Weighted Average/Moving average)

Changes in construction accounting method (percentage of completion, completed contract)

3) corrections or errors of material mistatement

4) change in principle that is inseperable from a change in accounting estimate eg…a company may change from capitalizing and amortizing a cost to recording it as an expense when incurred because future benefits associated with the cost have become doubtful.

Any other explanation or contribution to this will be appreciated. Thank you

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[stoleway]

Ok this is my understanding of this concept.

Do not make mention of the following in the opinion paragraph

1.Classification (unless the classification involves principle or departure from GAAP)

2.prospective treatment of a new principle ( I understand prospective as something that is being contemplated or anticipated in the future)….this anticipation does not have any precedence on current events

3.accounting errors that are not material

4. Estimates eg.changes in depreciation, amortization and depletion methods are treated as changes in accounting estimates. changes in percentages for bad debt expense or warranties, changes in salvage value or estimated useful life for depreciable assets

Make reference to the following in the opinion paragraph

1) change in reporting entity eg from single company to consolidated

2) change in accounting principle eg. any change from one GAAP to another GAAP

Changes in inventory flow method (FIFO, LIFO, Weighted Average/Moving average)

Changes in construction accounting method (percentage of completion, completed contract)

3) corrections or errors of material mistatement

4) change in principle that is inseperable from a change in accounting estimate eg…a company may change from capitalizing and amortizing a cost to recording it as an expense when incurred because future benefits associated with the cost have become doubtful.

Any other explanation or contribution to this will be appreciated. Thank you

REG -63│ 84!!
BEC- 59│70│ 71 │78!
AUD- 75!
FAR- 87!

Mass-CPA

[G3]

@stoleway

That helps 🙂

Anyone else have some “fact nuggets” to add?

3XBEC:75 * 4XREG:82 * 4XFAR:76 * 7XAUD:77

“It is hard to fail, but it is worse never to have tried to succeed.” Theodore Roosevelt

[G3]

@stoleway

That helps 🙂

Anyone else have some “fact nuggets” to add?

3XBEC:75 * 4XREG:82 * 4XFAR:76 * 7XAUD:77

“It is hard to fail, but it is worse never to have tried to succeed.” Theodore Roosevelt

[Author]

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