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In which of the following circumstances would an auditor most likely add an "emphasis of matter" paragraph to the auditor's report without changing the unmodified opinion?
A. The auditor is asking to report on the balance sheet, but not the other basic financial statements.
B. Management changed from one accepted accounting principal to another accepted accounting principal and accounted properly for the effects of the change as required by GAAP.
C. Certain transactions cannot be tested because of management's records retention policy which disposed of the underlying support.
D. The entity engaged in significant related party transactions, but the auditor viewed the entity's footnote disclosures of those transactions as inadequate relative to the requirements of GAAP.
Option B is correct i.e. Management changed from one accepted accounting principal to another accepted accounting principal and accounted properly for the effects of the change as required by GAAP .
Emphasis of matter paragraph is a space in auditor's report which includes the most significant matters according to judgement of auditor that requires user's attention. If management changed form one accounting principal to another and accounted properly as per GAAP (generally accepted accounting principle ) than auditor's report remains unmodified. But auditor can include this fact in EOM paragraph to bring the attention of users.
In which of the following circumstances would an auditor most likely add an "emphasis of matter"...
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