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 ________.
A)unqualified
B)qualified
C)adverse
D)disclaimer

Question

Quizplus · Accepted Answer

An unqualified audit report is issued when the auditor concludes that the financial statements are presented fairly in all material respects in accordance with the applicable accounting standards. In this scenario, management's decision to decrease the life of the equipment and increase the annual amortization is agreed upon by the auditor, and the change is considered to be a more accurate reflection of the nature of the asset. Therefore, there is no need for a qualified, adverse, or disclaimer audit report.

Management Has Decided That the Life of a Piece of Heavy