Chapter 17

A lawyer who refuses to provide appropriate information for a case that has been settled creates this circumstance for the auditor. a. scope limitation b. uncertainty c. lack of opinion

A

Which of the following is not an acceptable financial reporting framework? a. Generally accepted auditing standards basis. b. Cash basis. c. Tax basis. d. International accounting standards basis.

A

A(n) _____ opinion is appropriate if a material misstatement is considered pervasive.

Adverse

Type of Report: The scope of the auditors' examination is restricted and material and pervasive.

Disclaimer

T or F: A "Basis for Qualified Opinion" section is ordinarily placed immediately following the introductory paragraph in audit reports with qualified or adverse opinions.

False

Should an emphasis-of-matter paragraph on consistency be included in the report? A change in the estimated service lives of previously recorded plant assets based on newly acquired information.

No

A going concern is to be evaluated for a period not to exceed _________ beyond the date of the financial statements.

One year

T or F: A PCAOB public company audit report indicates that the audit was performed in accordance with PCAOB standards.

True

Should an emphasis-of-matter paragraph on consistency be included in the report? A change from direct costing to full absorption costing for inventory valuation.

Yes

What type or types of audit opinion are appropriate when financial statements are materially and pervasively misstated? Qualified Adverse a. Yes Yes b. Yes No c. No Yes d. No No

C

Auditors _____ an opinion when they are unable to form an opinion.

Disclaim

Auditors should use separate __________ to describe emphasis-of-matter items and basis for modifications of the audit report.

Paragraphs

"As discussed in Note XX to the FS, the company adopted SFAS XXX as of December 31, 20XX. Our opinion is not modified with respect to this standard."

Principles not consistently applied

Report Type: London Company has material investments in stocks of subsidiary companies. Stocks ofthe subsidiary companies are not actively traded in the market, and the CPA firm'sengagement does not extend to any subsidiary company. The CPA firm is able todetermine that all investments are carried at original cost, but has no real idea of marketvalue. Although the difference between cost and market could be material, it could nothave a pervasive effect on the overall financial statements.

Qualified

Client changed salvage values for number of fixed assets. Salvage values are realistic. What type of report is appropriate to issue?

Standard unmodified report; just a change in estimate

If group auditors make no reference to component auditors whose work they have relied on as basis for their report. Auditors are doing what?

Taking responsibility for the work

"The accompanying consolidated FS have been prepared assuming the company will continue as a going concern, but there is substantial doubt about its ability to continue as a going concern."

Going concern opinion

T or F: When a client omits notes to audited financial statements, the auditor should add an emphasis-of-matter section to the report indicating such omission and issue an unmodified report.

False

In the US, FS are most frequently prepared following this general-purpose framework. a. Tax basis b. GAAS c. GAAP d. IFRS

C

In an audit report on combined financial statements, reference to the fact that a portion of the audit was performed by a component auditor is: a. Not to be construed as a qualification, but rather as a division of responsibility between the two CPA firms. b. Not in accordance with generally accepted auditing standards. c. A qualification that lessens the collective responsibility of both CPA firms. d. An example of a dual opinion requiring the signatures of both auditors.

A

Jones, CPA, accepts a new client late in Year 5 and therefore had no opportunity to observe the physical inventory taken at December 31, Year 4. Jones found it impossible to obtain evidence by other auditing procedures as to the beginning inventories for Year 5. Jones observed the physical inventory at December 31, Year 5 and completed the audit satisfactorily. The report to be issued should: a. be unmodified as to the balance sheet and with a disclaimer of opinion as to the income statement and the statement of cash flows. b. be unmodified. c. be qualified as to all of the statements. d. be a disclaimer of opinion.

A

Which of the following ordinarily involves the addition of an emphasis-of-matter paragraph to an audit report? a. A consistency modification. b. An adverse opinion. c. A qualified opinion. d. Part of the audit has been performed by component auditors.

A

Match the type of circumstance with its description. a. Scope limitation b. Uncertainty 1. Audit evidence should be available for an item but it is not 2. Audit evidence for an item will become available at a future date

A - 1, B - 2

Auditors evaluate changes in accounting principles to determine if: (Select all that apply) a. Method of accounting for effect of change is in conformity with GAAP b. Management has justified the new accounting principle is preferable c. Accounting principle is consistent with the prior year d. Newly adopted principle is generally accepted

A, B, D

For scope limitations that have a material but not pervasive effect on the FS, auditors should issue a report that includes modifications to: (Select all that apply) a. opinion paragraph b. auditor's responsibility paragraph c. management's responsibility d. additional basis for modification paragraph

A, D

The auditors' report should be dated as of the date the: a. Report is delivered to the client. b. Auditors have accumulated sufficient evidence. c. Fiscal period under audit ends. d. Peer review of the working papers is completed.

B

Sufficient appropriate audit evidence is obtained when: (Select all that apply) a. the engagement letter is obtained from management b. FS are prepared c. all audit documentation has been reviewed

B, C

Disclosure requirements come from pronouncements issued by: (Select all that apply) a. PCAOB b. FASB c. AICPA d. GASB

B, D

When auditors determine a change in accounting principle is not appropriate, the auditors can issue: (Select all that apply) a. Unmodified opinion with emphasis of matter paragraph b. Qualified opinion c. Disclaimer of opinion d. Adverse opinion

B, D

FS disclosures regarding the firm's going concern status include all of the following except: a. pertinent conditions and events giving rise to substantial doubt b. management's evaluation and plan for dealing with the conditions c. possible discontinuance of operations d. audit procedures performed to identify and review going concern status

D

Report Type: Client-imposed restrictions significantly limit the scope of the auditor's procedures, and they are unable to obtain sufficient appropriate evidence - the possible effects on the F.S. of undetected misstatements, if any, could be both material & pervasive.

Disclaimer

Report Type: During the audit of Eagle Company, the CPA firm has encountered a significant scope limitation relating to inventory record availability and is unable to obtain sufficient appropriate audit evidence in that area.

Either qualified or disclaimer

Type of Report: Auditors determine that the possible effects on the financial statements of the inability to obtain sufficient evidence (i.e. a scope limitation) could be both material and pervasive.

Disclaimer

Changes in accounting estimates ______ result in an explanatory paragraph.

Do not

Report Type: Draves Company owns substantial properties that have appreciated significantly in value since the date of purchase. The properties were appraised and are reported in the balance sheet at the appraised values (which materially exceed costs) with related disclosures. The CPAs believe that the appraised values reported in the balance sheet reasonably estimate the assets' current values.

Either qualified or adverse

If substantial doubt about a going concern exists, an ______ paragraph is the most common resolution.

Emphasis of matter

Unmodified? Additional paragraph? A scope limitation.

No, yes

If auditors encounter a scope limitation but perform alternative procedures and obtain sufficient appropriate audit evidence, auditors should issue a(n) __________ report.

Unqualified

Should an emphasis-of-matter paragraph on consistency be included in the report? A change from the completed contract method to the percentageofcompletion method of accounting for longterm construction contracts.

Yes

Should an emphasis-of-matter paragraph on consistency be included in the report? Correction of a mathematical error in inventory pricing made in a prior period.

Yes

Unmodified? Additional paragraph? Reliance upon component auditors.

Yes, no

Unmodified? Additional paragraph? A change to an accounting principle that the auditor considers desirable.

Yes, yes

Unmodified? Additional paragraph? The emphasis-of-matter.

Yes, yes

For auditors that are reporting on two periods, consistency of GAAP application should be evaluated between the current period and: a. preceding two periods b. preceding period only c. preceding five periods

A

Which of the following would most likely be an appropriate addressee for an auditor's report? (In order of appropriateness)

Audit committee --> BOD --> Shareholders

An emphasis-of-matter paragraph for all but group audits should be included where in relation to the opinion paragraph? a. included in opinion paragraph b. before opinion paragraph c. following opinion paragraph

C

Auditors who want to emphasize significant client transactions with related parties can issue: a. qualified opinion b. qualified opinion with an emphasis of matter paragraph c. unmodified opinion with an emphasis of matter paragraph d. disclaimer of opinion

C

Assume that the opinion paragraph of an auditors' report begins as follows: "With the explanation given in Note 6, . . . the financial statements referred to above present fairly. . ." This is: a. An unmodified opinion. b. A disclaimer of opinion. c. An "except for" opinion. d. An improper type of reporting.

D

Type of Report: Auditors have doubt about a company's ability to continue as a going concern.

Unmodified opinion with emphasis of matter paragraph

Type of Report: The client has elected to not follow GAAP.

Adverse

"As discussed in Note XX to the FS, the company is a defendant in a lawsuit."

Auditor discretionary circumstances

An audit report for a public client indicates that the audit was performed in accordance with: a. Generally accepted auditing standards (United States). b. Standards of the Public Company Accounting Oversight Board (United States). c. Generally accepted accounting principles (United States). d. Generally accepted accounting principles (Public Company Accounting Oversight Board).

B

For a client who corrects a material misstatement in the prior year's FS and discloses the correction in the notes, auditors should issue: a. disclaimer opinion b. unmodified opinion with an emphasis of matter paragraph c. qualified opinion with emphasis of matter paragraph

B

Type of Report: The financial statements reflect a change from one generally accounting principles to another generally accepted accounting principle. The auditor considers the new principle preferable to the previous one. It has a material and pervasive effect.

Unmodified opinion with an emphasis of a matter paragraph

Type of Report: The financial statements reflect a change from one generally accounting principles to another generally accepted accounting principle. The auditor considers the new principle preferable to the previous one. It has a material effect.

Unmodified opinion with an emphasis of a matter paragraph

Should an emphasis-of-matter paragraph on consistency be included in the report? A change from the FIFO method of inventory pricing to the LIFO method of inventory pricing.

Yes

Auditors may add an emphasis-of-matter paragraph that refers to a matter that is _________ presented or disclosed.

Appropriately

A change in accounting principles that the auditors believe is not justified is likely to result in which of the following types of audit opinions? Qualified; Unmodified with Emphasis-of-Matter a. Yes Yes b. Yes No c. No Yes d. No No

B

If a client changes depreciation methods but the change is immaterial, the auditor should issue: a. Unmodified opinion with an emphasis of a matter paragraph b. Unmodified opinion c. Qualified opinion d. Disclaimer of opinion

B

Multiple uncertainties that cause the auditor to conclude it is not possible to form an opinion on the FS, the auditors should issue: a. adverse opinion b. disclaimer of opinion c. qualified opinion d. unmodified opinion

B

A client company has changed its accounting practices during the year, materially affecting its financial statements so as to make them seriously misleading and not in conformity with generally accepted accounting principles. The CPAs examining these financial statements should: a. modify the opinion with respect to consistency, referring to explanatory notes of the financial statements to fulfill disclosure requirements. b. disclaim an opinion and give reasons. c. render an adverse opinion and give reasons. d. modify the opinion with respect to consistency and, in an emphasis-of-matter paragraph, explain the changes and their effects on the net income of the period.

C

A material departure from generally accepted accounting principles will result in auditor consideration of: a. Whether to issue an adverse opinion rather than a disclaimer of opinion. b. Whether to issue a disclaimer of opinion rather than a qualified opinion. c. Whether to issue an adverse opinion rather than a qualified opinion. d. Nothing, because none of these opinions is applicable to this type of exception.

C

For departures from GAAP due to omission of information that is material and pervasive, auditors should issue a(n): a. unmodified opinion b. qualified opinion c. adverse opinion

C

Publicly owned companies are required to include in their annual reports: a. statements of retained earnings for the last two years b. statements of cash flows for the last two years c. statements of income for the last two years d. balance sheets for each of the last two years

D

T or F: A qualified opinion is appropriate when a departure from generally accepted accounting principles is material enough to deserve mention in the auditors' report, but not material enough to call for expression of a disclaimer of opinion.

False - Adverse

An emphasis-of-matter paragraph always _______ the opinion paragraph.

Follows

When auditors have concern about a company's ability to continue as a(n) __________ __________, they should consider whether management's plans for dealing with the conditions are likely to mitigate the problem.

Going concern

The title for a standard unmodified report for a nonpublic company must include the word __________ to describe the auditors relationship to the client.

Independent

Qualified opinions are issued when the financial statements are ________ misstated.

Materially

Should an emphasis-of-matter paragraph on consistency be included in the report? A change to including the employer's share of FICA taxes as "Retirement benefits" on the income statement. This information was previously included with "Other taxes."

No

Unmodified? Additional paragraph? A departure from GAAP.

No, yes

Report Type: The auditors believe that the F.S. have been presented in conformity with GAAP in all respects, except that a loss contingency that should be disclosed through a note to the F.S. is not included. While they consider this a material omission, they do not believe it pervasively affects the F.S.

Qualified

Auditors retained after the client has taken its beginning inventory count who are unable to obtain sufficient appropriate audit evidence relating to beginning inventory should issue and unmodified opinion on the BS and this opinion on the statement of income, retained earnings, and CF: a. disclaimer of opinion b. qualified opinion c. adverse opinion

A

The PCAOB audit report includes an additional paragraph indicating: a. auditors also have issued a report on the client's internal control over financial reporting b. more detailed discussion of the responsibility of auditors in PCAOB audit c. auditors are independent of client and board of directors

A

A scope limitation that does not allow the auditors to obtain sufficient appropriate audit evidence for a substantial portion of the FS should result in: a. qualified opinion b. adverse opinion c. disclaimer of opinion

C

An audit report for a public client indicates that the financial statements were prepared in conformity with: a. Generally accepted auditing standards (United States). b. Standards of the Public Company Accounting Oversight Board (United States). c. Generally accepted accounting principles (United States). d. Generally accepted accounting principles (Public Company Accounting Oversight Board).

C

If the auditors believe that related party transactions are not adequately described in the notes to the financial statements, they should: a. add an emphasis-of-matter paragraph to their unmodified opinion. b. consider more thoroughly the client's going concern status. c. qualify their opinion or issue an adverse opinion. d. disclaim an opinion.

C

Modifications to the audit report for a departure from GAAP that is material but not pervasive include a qualification of the opinion paragraph and an additional basis for modification paragraph: a. after the opinion b. anywhere in the report c. before the opinion

C

When the matter is properly disclosed in the financial statements, the likely result of substantial doubt about the ability of the client to continue as a going concern is the issuance of which of the following audit opinions? Qualified; Unmodified with Emphasis-of-Matter a. Yes Yes b. Yes No c. No Yes d. No No

C

Which of the following accounting changes requires an emphasis of matter paragraph regarding consistency in auditor's report? a. Useful life b. Write off of patent c. Change in depreciation from straight-line to accelerated d. Change in calculating bad debt expense from 1% to 2%

C

Which of the following is least likely to result in inclusion of an emphasis-of-matter paragraph in an audit report? a. The company is a component of a larger business enterprise. b. An unusually important significant event. c. A decision not to confirm accounts receivable. d. A risk or uncertainty.

C

Which of the following is not correct relating to an audit report for a public company? a. It must include the city and state in which it was issued. b. It refers to standards of the Public Company Accounting Oversight Board. c. It includes the term "PCAOB Compliant" in the title. d. It includes an additional paragraph indicating that the auditors have also issued a report on the client's internal control over financial reporting.

C

Auditors that are unable to obtain sufficient appropriate audit evidence can issue a(n): (Select all that apply) a. Unmodified opinion b. Adverse opinion c. Qualified opinion d. Disclaimer of opinion

C, D

Report Type: Slade Company has material investments in stocks of subsidiary companies. Stocks ofthe subsidiary companies are actively traded in the market. Management insists that allinvestments be carried at original costs, and the CPA firm is satisfied that the originalcosts are accurate. The CPA firm believes that the client will never ultimately realize asubstantial portion of the investments because the market value is much lower than thecost; the client has fully disclosed the facts in notes to the financial statements.

Either qualified or adverse

When there is significant doubt as to the ability to continue as a going concern, a(n) _________ paragraph may be added.

Emphasis of matter

Limitations on the scope of an audit may create a situation in which the auditors are unable to obtain sufficient ________.

Evidence

T or F: A USA nonpublic company audit report indicates that the audit was performed in accordance with "generally accepted accounting principles."

False

T or F: A disclaimer of opinion may be used as a way to avoid expressing an adverse opinion.

False

T or F: A scope limitation during an audit will result in either a qualified or adverse opinion, depending upon the pervasiveness of the misstatement.

False

T or F: Audit reports for group audit engagements are considered to be qualified reports.

False

T or F: Emphasis-of-matter paragraphs are potentially appropriate in all reports except those with unmodified opinions.

False

T or F: The auditors should generally issue a qualified opinion if circumstances involved make it impossible for them to observe the physical inventory or to confirm accounts receivable, even when sufficient appropriate audit evidence has been gathered using alternate procedures.

False

T or F: The unique nature of modified opinions makes them desirable to most clients.

False

Type of Report: The financial statements contain a material departure from generally accepted accounting principles.

Qualified

Type of Report: The scope of the auditors' examination is restricted and material.

Qualified

T or F: The term material may be defined as "sufficiently important to influence decisions made by reasonable users of financial statements.''

True

A situation in which conclusive audit evidence concerning the ultimate outcome cannot be gathered because the outcome will occur in the future is called a(n) __________.

Uncertainty

Report Type: The client has changed from LIFO to FIFO for inventory valuation purposes - the auditors do not concur with this change. The effect is considered material & pervasive.

Adverse

Type of Report: A material misstatement is considered pervasive.

Adverse

Type of Report: The financial statements contain a material and pervasive departure from generally accepted accounting principles.

Adverse

Auditors who want to restrict the use of a nonpublic company's audit report to management, the board of directors and shareholders should: a. include an emphasis of matter paragraph describing the restriction b. include an other-matter paragraph describing the restriction c. modify audit opinion to restrict use of it

B

The primary responsibility for the adequacy of disclosure in the financial statements of a publicly-held company rests with the: a. auditor in charge of the field work. b. management of the company. c. partner assigned to the audit engagement. d. Securities and Exchange Commission.

B

This type of opinion is most appropriate for the situation in which the auditor wants to emphasize a matter not presented or disclosed in the FS. a. Unmodified opinion on group FS b. Unmodified opinion with an other-matter paragraph c. Unmodified opinion with an emphasis-of-matter paragraph d. Standard unmodified report

B

If the auditors indicate in the report that the opinion is based, in part, on the report of component auditors who were responsible for the audit of part of the total financial statement data, the auditors are: a. in effect qualifying the opinion. b. abrogating responsibility to those users who rely on the CPA firm's reputation as a basis for relying on the reported financial statements. c. taking complete responsible for the work of the other auditors. d. properly indicating a division of responsibility, and the report should further indicate in an appropriate quantitative form the proportionate responsibility being assumed by each set of auditors.

D

Should an emphasis-of-matter paragraph on consistency be included in the report? A change from deferring and amortizing preproduction costs to recording such costs as an expense when incurred because future benefits of the costs have become doubtful. The new accounting method was adopted in recognition of the change in estimated future benefits.

Yes

To evaluate consistent application of GAAP when reporting on only the current period, auditors should consider the current period under audit and: a. preceding five periods b. preceding period c. preceding two periods

B

Upon the advice of its auditors, Smith Company changed the method of computing depreciation from the straight-line method to an accelerated method with a material effect upon the financial statements. The auditors' report: a. must be qualified for the accounting change. b. should include an additional emphasis-of-matter paragraph highlighting the accounting change. c. should be a standard unmodified report. d. should contain modification of the opinion paragraph.

B

For comparative FS, the auditor can issue an opinion that covers both years if: a. the audit opinion was unmodified in the prior year b. predecessor auditors issued an unmodified opinion on the prior year c. the prior year was audited by the firm

C

When an adverse opinion is expressed, the opinion paragraph should include a direct reference to: a. a note to the financial statements which discusses the basis for the opinion. b. the consistency or lack of consistency in the application of generally accepted accounting principles. c. the paragraph that describes management's responsibilities. d. a separate paragraph that discusses the basis for the opinion expressed.

D

T or F: A change in accounting principle from one generally accepted accounting principle to another normally would not prevent the issuance of an unmodified audit opinion, provided the effects of the change are set forth in a note to the financial statements and the change is justified.

True

T or F: A qualified opinion that is issued because of a departure from generally accepted accounting principles should contain a separate section explaining the departure and its effects.

True

T or F: An adverse opinion is an opinion that the financial statements are not presented fairly in accordance with generally accepted accounting principles.

True

T or F: If a company is faced with any uncertainty such as the prospect of a strike or the possible imposition of wage and price controls, the auditors should issue a qualified or adverse opinion.

False

T or F: For most American corporations, a Form S-1 must be filed with the SEC if a U.S. company is planning to issue securities to the public.

True

T or F: No emphasis-of-matter paragraph is added to an audit report when the group auditor chooses not to rely upon the component auditor.

True

T or F: Substantial doubt about a client's ability to remain a going concern ordinarily results in a report with an unmodified opinion with an emphasis-of-matter paragraph or a disclaimer of opinion when the doubt is properly disclosed in the financial statements.

True

Report Type: Bowles Company is engaged in a hazardous trade and has obtained insurance coverage related to the hazard. Although the likelihood is remote, a material portion of the company's assets could be destroyed by a serious accident.

Unmodified Standard Report

Type of Report: The auditors wish to emphasize in the report a material and pervasive subsequent event described in the notes to the financial statements.

Unmodified opinion with an emphasis of a matter paragraph

Type of Report: The auditors wish to emphasize in the report a material subsequent event described in the notes to the financial statements.

Unmodified opinion with an emphasis of a matter paragraph

Your audit of the Abbox Co. reveals that the firm's poor financial condition creates substantial doubt about its ability to continue as a going concern. Assuming that the financial statements have otherwise been prepared in accordance with generally accepted accounting principles and do include proper presentation of the matter, what disclosure should you make of the company's precarious financial position? a. You should issue an unmodified opinion, but use an emphasis-of-matter paragraph to direct the reader's attention to the poor financial condition of the company as described in the financial statements and the notes. b. You need not insist on any particular disclosure, since the company's poor financial condition is clearly indicated by the financial statements themselves. c. You should issue an adverse opinion on the financial statements. d. You should provide adequate disclosure and appropriately qualify your opinion because of the uncertainty.

A

T or F: The auditors are not allowed to change their opinion on financial statements that were reported on in prior years.

False

Modified opinions are required when there is: (Select all that apply) a. Departure from GAAP b. Component auditors that audit a subsidiary c. Scope limitation d. Change in accounting principle

A, C

A(n) __________ opinion states the FS are not presented in conformity with GAAP.

Adverse

Group auditors need to obtain an understanding of whether __________ auditors are competent.

Component

A note to the financial statements of the First Security Bank indicates that the company self insures itself for the first $100,000 of liability to employees, with liability insurance for the remainder. Based upon this, one would expect the auditors' report to express: a. a qualified opinion. b. a disclaimer of opinion. c. an adverse opinion. d. a standard unmodified opinion.

D

T or F: A standard unmodified audit report does not mention consistency of application of accounting principles.

True

Type of Report: Auditors have obtained sufficiently appropriate evidence to conclude that the financial statements are not materially misstated.

Unmodified

Report Type: The client has changed from LIFO to FIFO for inventory valuation purposes - the auditors concur with this change. The effect is considered material to the financial statements, although inventory is not a large part of total assets.

Unmodified - emphasis-of-matter paragraph (auditors concur, material but inventory is not a huge part of assets)

Report Type: The auditors decide not to make reference to the report of a component auditor that audited a portion of group financial statements.

Unmodified - standard report (does not affect the opinion)

If auditors have substantial doubt about a company's ability to continue as a going concern and management's disclosures are materially inadequate, the appropriate report is a(n): (Select all that apply) a. Disclaimer of opinion b. Adverse opinion c. Unmodified opinion with an emphasis of matter d. Qualified opinion

B, D (inadequate disclosure = departure from GAAP)

An auditors' opinion exception arising from a limitation on the scope of the audit should be explained in: a. the auditors' report. b. both a note to the financial statements and the auditors' report. c. a note to the financial statements. d. the mandatory adjusting entry whenever such a scope limitation occurs.

A

The audit report should be signed with the name of: a. CPA firm b. Individual partner in charge of the audit c. managing partner of firm

A

The auditors who wish to draw reader attention to a financial statement note disclosure on significant transactions with related parties should disclose this fact in: a. An emphasis-of-matter paragraph to the auditors' report. b. A footnote to the financial statements. c. The body of the financial statements. d. The "summary of significant accounting policies" section of the financial statements.

A

Match the form with the purpose. a. S-1 through S-11 b. 10-Q c. 10-K 1. Registration statements for companies planning to issue securities to the public 2. Annual filing of audited FS 3. Quarterly filing of financial information unaudited but reviewed by auditors

A - 1, B - 3, C - 2

Match the audit report with its description. a. Make reference to component auditors b. Make no reference to component auditors 1. Group auditor takes full responsibility for the entire audit 2. Shared responsibility opinion between the group auditor and the component auditor

A - 2, B - 1

What is the objective of auditor reporting responsibilities with respect to consistency? a. To give assurance that adequate disclosure will be made so that there will be comparability of financial statements between companies in the same industry. b. To give assurance that users will be informed of the lack of comparability of financial statements between periods due to changes in accounting principles. c. To give assurance only that the same accounting principles have been applied to all similar transactions within each period presented. d. To give assurance that the comparability of financial statements between periods has not been materially affected by any type of change.

B