Adequate justification for a change


Question: If management fails to provide adequate justification for a change from one generally accepted accounting principle to another, the auditor should

A) Add an explanatory paragraph and express a qualified or an adverse opinion on the company's financial statements for lack of conformity with generally accepted accounting principles.

B) Disclaim an opinion on the company's financial statements because of uncertainty.

C) Disclose the matter in a separate explanatory paragraph(s) but not modify the opinion paragraph on the company's financial statements.

D) Neither modify the opinion on the company's financial statements nor disclose the matter because both principles are generally accepted.

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Accounting Basics: Adequate justification for a change
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