On which of the following matters would it not be appropriate for the auditors to report using an explanatory paragraph?
A)An indication that a predecessor auditor examined prior year's financial statements presented in comparative form.
B)Procedures performed related to supplementary mineral reserve information required by the Financial Accounting Standards Board.
C)A departure from GAAP that has a material, but not pervasive, effect on the financial statements.
D)An updated opinion on comparative financial statements that differs from the opinion originally issued by the auditors.

Question

Quizplus · Accepted Answer

An explanatory paragraph is used to draw attention to matters such as a change in accounting principle, going concern issues, or to emphasize a matter regarding the financial statements. A departure from GAAP that has a material effect on the financial statements typically requires a modification to the auditor's opinion, not just an explanatory paragraph, unless it is adequately disclosed and its impact is clearly explained.

On Which of the Following Matters Would It Not Be