Management has decided that the life of a piece of heavy equipment should be decreased from 15 years to 10 years thus increasing the annual amortization.The auditor agrees that this amortization period is more reflective of the nature of the asset.The type of audit report that should be issued is:

Question

Quizplus · Accepted Answer

The change in the amortization period is a change in accounting estimate, which is acceptable if it reflects the asset's nature. Since the auditor agrees with the change, an unqualified opinion is appropriate.

Management Has Decided That the Life of a Piece of Heavy