CFA Practice Question

There are 86 practice questions for this study session.

CFA Practice Question

What type of audit opinion is required when a company has a change in accounting principles?
A. A disclaimer of opinion
B. A qualified audit opinion
C. An unqualified opinion with additional explanatory language
Explanation: When a company has a change in accounting principles, the auditor must add explanatory language to an unqualified audit opinion that refers to the change in accounting principles.

User Contributed Comments 5

User Comment
staudinger i guess the word unqualified is a bit misleading for nonnative english speakers.

Q: "What type of audit opinion is required...?"
A: "An unqualified opinion ... "

Sounds a bit like asking the toilet cleaner for an audit opinion ...
clarelau haha you are quite right...Staudinger...
gavs shoulnt this be qualified with explation since there is a change in accounting principle
tankdan If statements make an exception to GAAP, auditor may issue a QUALIFIED Opinion and explain these exceptions in the the audit report.

I guess the question doesn't specify that it's an exception to GAAP, and it could just be a change in the company's accounting method.
Yrazzaq88 A change in accounting principle does not always mean a qualified opinion. It can simply be, a company is changing from Straight-Line method to Double Declining method. It might or might not have a significant material impact on the FS.

In this case, it has only simply stated "change", so therefore, unqualified is the answer.
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