An entity changed from the straight-line method to the declining-balance methodof depreciation for all newly acquired assets. This change has no material effect onthe current year’s financial statements but is reasonably certain to have a substantialeffect in later years. If the change is disclosed in the notes to the financial statements,the auditor should issue a report with a(n)(1) qualified opinion.(2) unqualified opinion with explanatory paragraph.(3) unqualified opinion.(4) qualified opinion with explanatory paragraph regarding consistency.

Q: Accounting Changes It is important in accounting theory to be able to distinguish the types of…

A: Accounting theory is a set of assumptions, frameworks, and methodologies used in the study and…

Q: Which of the following must be recorded in the accounting records when an asset that is NOT held for…

A: As given in the question non current assets is derecognized, which means sold or no more useful.

Q: hich of the following best describes the independent auditors' approach to obtaining satisfaction…

A: Auditor: An auditor is a person or a group of people who is responsible for conducting an audit of…

Q: 1. An entity made a very large arithmetical error in the calculation of depreciation. The correction…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Auditors found that the entity has not capitalized a material amount of leases in the financial…

A: Audit Opinion: The opinion presented by an auditor on the basis of findings of the audit…

Q: Changes in accounting policy are Permitted if the change will result in a more reliable and more…

A: Change in accounting policy refers to change in the method of accounting principles or rules…

Q: When it is difficult to distinguish between a change of estimate and a change in accounting policy,…

A: Answer : (a) Treat the entire change as a change in  estimate with appropriate  disclosure.

Q: For each of the following items, indicate the type of accounting change. (a1) (a) Change from…

A: The accounting change is generally a change in accounting principle, change in accounting estimate,…

Q: It is legal and ethical to use one method of deprecia method on the company's financial statements.

A: True, it is legal and ethical to use one method of depreciation for taxes and another method on the…

Q: Analyze the following: I – All entities that issue an annual report may issue interim financial…

A: An entity prepares financial statement at the year-end which shows many components in summaries or…

Q: The accounting and auditing literature discusses several different types of accounting changes. For…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Under the reporting requirements for impaired assets, impairment losses for assets to be held and…

A: Under the reporting requirements for impaired assets, impairment losses for assets to be held and…

Q: Under IFRS, changes in accounting policies are a. permitted if the change will result in a more…

A:

Q: Which of the following is a valid statement regarding "assets held for sale"? X Depreciation…

A: Assets Held For Sale: These are assets that company plans to sell and are non-current (or…

Q: Which of the following may not be included in a typical audit program for auditing Retained…

A:

Q: You have been engaged to audit TRULY-HONEST Company, a trading company, for the year ended December…

A: Land and Building: Land and building are individual assets and  separately accounted  even if they…

Q: For each of the following situations, indicate whether you agree or disagree with the financial…

A: While recording the transactions in the books of accounts or preparing the accounts there are some…

Q: In accordance with IAS 36 Impairment of Assets, which of the following statements are true?…

A: Assets are described as those resources which are owned or acquired by the business in order to use…

Q: An annual report of Costco Wholesale Corporation, the large discount company, contained the…

A: The financial position of the company can be arrived from the income statement prepared by the…

Q: An annual report of Costco Wholesale Corporation, the large discount company, contained the…

A: Impairment used to occur because of an unusual or majorly one time event like - change in economic…

Q: Which of the following techniques can be used by management to overstate long-lived assets? * A.…

A: Long lived assets are also known as Non-current assets which provides economic benefits for a period…

Q: During the current year, an entity acquires another entity in a transaction properly accounted for…

A: If at the time of the acquisition, some of the information for valuing assets was incomplete and the…

Q: Which of the following best describes the independent auditor's approach to obtaining satisfaction…

A: Business organizations are required to charge the depreciation expense so that the assets are shown…

Q: Which of the following statement is correct regarding accounting changes that result in financial…

A: Introduction:- The following statement is correct regarding accounting changes that result in…

Q: Which statement is incorrect regarding reclassification of financial assets? A. Reclassifications…

A: IFRS 9 talks about Reclassification of Financial Assets. IFRS 9 sets out certain criteria for…

Q: Rayan Company, a CPA firm, conducted an audit for the 2020 financial statements of Tia Corporation.…

A: According to the accounting rules, whenever there is any expenditure incurred on repairs and…

Q: Depreciation for a prior period was incorrectly understated by $950,000. The error was discovered in…

A: Income Statement: - Income Statement focuses on revenues and expenses of the company during a…

Q: Inter Manufacturing Company used to depreciate its equipment at the rate of 20%. During the current…

A: Auditing means the independent checking of company operation by outsider. Auditor is a qualified and…

Q: If the reorganization value of a company emerging from bankruptcy is larger than the fair values…

A: Goodwill: Goodwill is the good reputation developed by a company over years. This is recorded as an…

Q: Which statement is incorrect regarding reclassification of financial assets? Group of answer…

A: (1) As per the relevant Financial Reporting Standards, the Reclassification is allowed only when an…

Q: Which of these situations would require auditors to append an emphasis-of-matter paragraph about…

A: Answer:   Option d.

Q: A certain contingent liability was evaluated at year-end, and considered to have a reasonable…

A: Contingent liabilities are the liabilities that may or may not be happened in the future and it…

Q: The errors below were noted after the books of CalMart Corporation were audited at the close of 2021…

A: We will analyse each transaction's effect on income, assets, liabilities, retained…

Q: For every of the following independent situation, discuss the issue and describe the impact on the…

A: Auditing is the inspection of the financial records of the company or organisations with no bias and…

Q: Derecognition is the removal of all or part of a recognised asset or liability from an entity’s…

A: If any amount is received for an asset which is Derecognized then it should be treated as liability.…

Q: The accounting and auditing literature discusses several different types of accounting changes. For…

A: Given the following circumstances under which the auditor needs to add a paragraph to the audit…

Q: Kline Company failed to record depreciation of equipment. How does this omissionaffect Kline’s…

A: Answer: d. Net income is understated and assets are understated.

Q: conceptual framework of accounting

A: Conceptual framework is developed by FASB to act as a fundamental check to develop accounting…

Q: Discuss whether the changes described in each of the cases below require recognition in the CPA’s…

A: Requirement a:   This change must be reported in the CPA report due to the reason that a change in…

Q: Various Reporting Situations. Assume that the auditors encountered the following separate situations…

A:

Q: If the criteria are met after the end of reporting period, an undertaking shall: A. Classify a…

A: Following is the answer to the given question

Q: Explain the accounting treatment in the event that an impairment review of a non-current asset which…

A: Impairment loss: It is a decrease in carrying amount of the asset since the fair value is declined.…

Q: Which statement is incorrect regarding reclassification of financial assets? An entity shall…

A: As per IFRS 9, an entity does not restate any previously recognized gains, losses, or interest.

Q: The prior period will be affected if during the current year the management of an entity decides to…

A: Prior period is the period before the current accounting year. Non current asset is the long term…

Q: Under PFRS 3, when is a gain recognized in consolidating financial information? Group of answer…

A: Introduction:- As per IFRS 3 deals Business Combinations. Business combinations means acquirer…

Q: If the criteria are met after the end of reporting period, an undertaking shall: A. Classify a…

A: Undertaking normal time period is of 12 months. An undertaking may require to record a financial…