[Isaac]

I always want to put “Qualified or Adverse” opinion, when the question says “there has been a change in accounting principle that is material”. Why am I wrong?

What’s the correct type of report? Unqualified with explanatory paragraph? why?

Thanks

FAR...80...Yaeger...Nov/2011
AUD...Exam...Oct/2012
REG
BEC

[Anonymous]

I haven't taken audit in over a year but this is my understanding. It isn't qualified or adverse because you don't have ‘bad' information, it is just different. It is like switching from Completed Contract to Percentage of Completion. They are both GAAP but will cause a change in principle (or practice if that is easier). A change in principle is different than an error. An error would be going from Non-GAAP to GAAP. Clear as mud?

[Anonymous]

I am studying AUD. The reason is because if properly disclosed and they are going to fix the change, you can issue a modified unqualified (which is just unqualified in the MCQ). If not, then you have to qualify it. An example would be from cash to accrual basis to give you an idea because that is a change that can be forced due to growth.

[Mjs157]

TID-PIE-GCDO

The C in GCDO stands for Consistency.

The report shall identify those circumstances in which such principles have not been consistently observed in the current period in relation to the preceding period.

[Isaac]

Thanks everyone. Makes perfect sense now. It's so simple. I just couldn't see it for some reason.

FAR...80...Yaeger...Nov/2011
AUD...Exam...Oct/2012
REG
BEC

[Author]

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