wiz-icon
MyQuestionIcon
MyQuestionIcon
1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

The client has changed method of depreciation from straight line to written down value method. This has been disclosed as a note to the financial statements. It has an immaterial effect on the current financial statements. It is expected, however, that the change will have a significant effect on future periods. Which of the following option should the auditor express?

A
Unqualified opinion
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
B
Qualified opinion
No worries! We‘ve got your back. Try BYJU‘S free classes today!
C
Disclaimer of opinion
No worries! We‘ve got your back. Try BYJU‘S free classes today!
D
Adverse opinion
No worries! We‘ve got your back. Try BYJU‘S free classes today!
Open in App
Solution

The correct option is A Unqualified opinion
The effect of such change is expected to materialize in the future and not in the current financial year.
Hence, if the effect is immaterial in the current financial year, he shall not give a qualified report based on future expectations.
It is a change in accounting policy the matter has been disclosed in the financial statements already; it does not call for a qualified report.

flag
Suggest Corrections
thumbs-up
0
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Overview of Accounting Processing
ACCOUNTANCY
Watch in App
Join BYJU'S Learning Program
CrossIcon