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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

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:

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  • 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.

  • disclaim an opinion and give reasons.

  • render an adverse opinion and give reasons.

  • modify the opinion with respect to consistency, referring to explanatory notes of the financial statements to fulfill disclosure requirements.

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