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Chp 3 pp question
Terms in this set (13)
• Decrease in the life of an asset for depreciation purposes is a change of this type.
• Variation in format and presentation of financial statements is a change of this type.
• A change from LIFO to FIFO inventory valuation is a change of this type.
• A change from straight line depreciation to double declining depreciation is a
• A change in reporting entity, such as the inclusion of an additional company in combined financial statements is a change of this type
• Correcting a previous year's mathematical error is a change of this type.
• Changes of this type require a standard audit report with an explanatory paragraph
• Changes of this type require only disclosure in the footnotes.
a misstatement in the financial statements can be considered material if knowledge of the misstatement would affect a decision of this person
reasonable users of the financial statements
this type of materiality affects overall fairness of the fin statements such that a fin statements are in question
this type of audit report is issued when a company recorded an immaterial prepaid insurance as an asset in the pervious year and decides to expense it in the current year to reduce record-keeping costs
unmodified standard report
materiality is assessed at this level when the company will not allow the auditor to inspect the miniature books from the board of directors meetings
materiality is assessed at this level when users' decisions are likely to be affected only if the information in question is important to the specific decisions being made and the overall financial statement are presented fairly
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