When auditors wish to issue an unqualified opinion but highlight that the entity changed its method of accounting for software development costs,what type of report modification would be most appropriate?
A) Identify the change in accounting methods in the introductory paragraph.
B) Identify the change in accounting methods in the opinion paragraph.
C) Identify the change in accounting methods in an emphasis-of-matter paragraph.
D) Identify the change in accounting methods in an other-matter paragraph.

Question

Quizplus · Accepted Answer

A change in accounting method is considered a material event that may need to be highlighted in the auditor's report. Emphasis-of-matter paragraphs are used to highlight matters that are material to the financial statements but are not related to the auditor's opinion. Therefore, by identifying the change in accounting method in an emphasis-of-matter paragraph, the auditor can provide additional information to users of the financial statements without affecting the unqualified opinion.

When Auditors Wish to Issue an Unqualified Opinion but Highlight