"As described in Note 5 to the financial statements,General Express changed its statistical method of computing product warranty expense for the year ended December 31,2014…" is an illustration of a
A) consistency change requiring a qualified opinion.
B) scope limitation.
C) departure from generally accepted accounting principles.
D) report with a consistency modification.

Question

Quizplus · Accepted Answer

The statement given in the question indicates a change in accounting policy which relates to consistency. Since the change was accounted for properly in the financial statements and appropriately disclosed, the auditor would provide a modified opinion that reflects the change. Therefore, a report with a consistency modification is the best answer.

"As Described in Note 5 to the Financial Statements,General Express