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

Business

Jean Braun

15 June, 11:27

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.

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Answers (1)

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Cookie Dough · Answer 1

The entity changed accounting principles having an immaterial effect on the entity's financial position, results of operations, and cash flows.

Explanation:

Although it is common for any financial statement that is prepared according to the general purpose framework to clearly present in it the financial position, cash flows, and results of operations of an organization, however, auditors are expected to issue standard (unmodified) report if the organization's changed accounting principle does not have any significant impact on the financial position, results of operations, and cash flows.