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The company is in the airline leasing business. During the year, they changed depreciation methods, which materially increased depreciation expense. They also extended the useful
The company is in the airline leasing business. During the year, they changed depreciation methods, which materially increased depreciation expense. They also extended the useful lives of their planes, which significantly decreased depreciation expense. The net effect of these changes is immaterial. Both changes are adequately disclosed. The auditor will most likely issue a(an): O Standard unmodified opinion O Unmodified opinion with explanatory paragraph O Unmodified opinion with changes in standard report wording. O Qualified opinion O Disclaimer of opinion O Adverse opinion Because of increasing profits and inventory prices, the company changed from FIFO to LIFO inventory, which had a material effect on inventory and cost of sales. The change is adequately disclosed in the financial statements, and the auditor concurs with the change. The auditor will most likely issue a(an): Standard unmodified opinion Unmodified opinion with explanatory paragraph O Unmodified opinion with changes to standard report wording O Qualified opion Disclaimer of opinion Adverse opinion als Because of declining profitability and a negative working capital balance, the auditor has substantial doubt about whether the company will continue in existence. The auditor will most likely issue a(an): Standard unmodified opinion O Unmodified opinion with explanatory paragraph O Unmodified opinion with changes to standard report wording Qualified opinion Disclaimer of opinion Adverse opinion
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