The client has changed from double declining balance to straight line depreciation for its equipment. The effect on this year’s income is material, and no information is disclosed in footnotes related to the change. You believed the change aligns with change in usage pattern of the equipment, except that adequate disclosure is made relating to the change of depreciation method after your advice, will your opinion be different? Q) Discuss the most appropriate type of opinion the auditor should issue. Explain briefly the reason for the opinion.

Q: After a while, Brekdak as head of the Accounting Department, realized that the system of record that…

A: The answer for the above practical question on consistency in applying policies and procedures for…

Q: Which of the following is not a counterbalancing error? Non-recognition of the unused portion of…

A: Counterbalancing errors are those errors which will counter balance automatically in the next year.…

Q: Assume that your firm was auditing General Electric in 2000 and was recommending an adjustment to…

A: Given case is: Assume that your firm was auditing General Electric in 2000 and was recommending an…

Q: Auditors should obtain evidence that there are no significant amounts of unrecorded retirements of…

A: Audit evidence: It is  is evidence acquired by  the auditors during the  financial audit

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: The client has restated the prior-year statements because of a changefrom LIFO to FIFO. How should…

A: In the given case, the departures from GAAP identified by the auditors are immaterial, in this case…

Q: Do you consider that the change of accounting policies that have been used for a long time is an…

A: The answer for the practical question on consistency in applying policies and procedures for…

Q: Which of the following would have an effect on the presentation of past years' comparable financial…

A: Financial Statement- Financial statements contain information about an entity's financial activity…

Q: There are various types of accounting changes, each of which is required to be reported…

A: Depreciation: Depreciation refers to the reduction in the monetary value of a fixed asset due to its…

Q: There are various types of accounting changes, each of which is required to be reported differently.…

A: 1.A change from the sum-of-the-years’-digit method of depreciation to straight line method, creates…

Q: When the estimate of an asset's useful life is changed, select the false statement a. depreciation…

A: Depreciation refer to fall in the value of asset every year. It is an accounting word that refers to…

Q: . In auditing the financial statements of your client, you have ascertained the following criteria…

A: Explanation : Criteria to account for agricultural activities Capability to change/transformation :…

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: ems of equipment from the accounting records and then attempt to locate them during the plant tour.…

A: Auditor refers to an individual whose job is to identify and check all the records of a company.

Q: The auditor assigned to audit the property, plant and equipment requested a schedule of property…

A: 1. Completeness assertions : This assertion asserts that  all the transactions are recorded in…

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: A company has been making losses on its operations due to many factors such as competition,…

A: Professional Skepticism: To demonstrate professional skepticism implies to have a questioning…

Q: Suppose an auditor wants to perform a substantive analytical procedure to provide audit evidence to…

A: Interest expense can be referred to as the amount that is paid or payable on the amount borrowed…

Q: Which of the following is not a counterbalancing error? O Omission of accrued interest expense at…

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

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: 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: depreciable, the absence of depreciation

A: Depreciation refers to the decrease in the value of an intangible asset over a period of time. There…

Q: For the following independent situations, assume that you are the audit partner on the engagement:…

A: Audit opinion refers to the decision of the auditor which he takes after evaluating the financial…

Q: Mike Crane is an audit senior of a large public accounting firm who has just been assigned to the…

A: a.The ethical issues are the honesty and integrity of Frost Corporation's financial reporting…

Q: The following events occurred during 2016 for various audit clients of your firm. Consider each…

A:

Q: State the assertion (existence, occurrence, rights & ownership, completeness, valuation/accuracy,…

A: a)Cut off assertion.should be applied ... b) valuation... C)Completeness.. D) classification.. E)…

Q: You were requested to personally deliver your auditor’s report to the board of directors of Sebal…

A: Discontinued Operations The income from discontinued operations is stated separately in the income…

Q: (Change in Estimate) Mike Crane is an audit senior of a large public accounting firm who has just…

A: a. The ethical issues are the honesty and integrity of Frost Corporation's financial reporting…

Q: materiality level

A: Option a is wrong because the auditor can not measure the amount of undetected misstatements. Option…

Q: nce that there are no significant amounts of unrecorded retirements of property, plant and…

A: Audit evidence refers to the information obtained by auditors while performing audit procedures to…

Q: The auditor may note that annual depreciation expense is too low for a class of assetsby noting(1)…

A: Depreciation is the allocation of cost of asset over the useful life of the asset.

Q: Assume that the client’s internal controls over the recordingand classifying of fixed asset…

A: Fixed asset additions can be examine through supporting documents i.e. invoices and can conduct…

Q: The company you audited recently did not have any knowledge in asset management and therefore does…

A: Assets Management Basically, in any form of organisation proper management of investment which are…

Q: For Questions 21 through 30, assume that you are reporting on an audit of a client’s financial…

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

Q: During the audit of LDF Co’s bad debt provision, the auditor discovered that £500,000 of costs…

A: Audit is defined as the examination of the different books of accounts through auditor followed by…

Q: An assessment of accounting practices for asset impairments is especially important in the context…

A: The main purpose of introducing impairment of asset accounting standard is to ensure that the assets…

Q: Upon investigation, an auditor concludes that the client has recognized an internally developed…

A: The answer for the multiple choice question and relevant explanation are presented hereunder :…

Q: Which of the following accounting policies is an example of costs versus benefits constraint being…

A: in accounting some policies are exercised as cost versus benefits in disclosure of financial…

Q: The CPA firm auditing Mason Street Recording Studiosfound that total stockholders’ equity was…

A:

Q: Before applying substantive procedures to the details of asset and liability accounts at an interim…

A: The answer for the multiple choice question and relevant explanation are presented hereunder :…

Q: In the examination of property, plant, and equipment, the auditor tries to determine all of the…

A: While examining the Property Plant and equipment Auditor verifies the authorized person to purchase…

Q: If an auditor tours a production facility, which of the misstatements of questionable  practices is…

A: In the Production Facility, the auditor would most likely detect that necessary facility maintenance…

Q: Which of the following statements is false?   Under IFRS, expenses include losses that are not the…

A: IFRS are an accounting framework and standards issued by the IFRS Foundation and the International…

Q: please answer with reason

A: Audit:   It is a procedure for examining a company's financial statements. The goal of auditing is…

Q: After a while, Brekdak as head of the Accounting Department, realized that the system of record that…

A: Accounting standards are the rules or policies, required to be followed by public companies in…

Q: An entity changed from the straight-line method to the declining-balance methodof depreciation for…

A: Any auditor has the option to choose any of the four opinions regarding the audit reports. They are:…

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.