[Anonymous]

Hello,

In regards to the following question taken off of Ninja CPA MCQ’s:

In which of the following should an auditor’s report refer to the lack of consistency when there is a change in accounting principle that is significant?

A. The scope paragraph

B. The opinion paragraph

C. An other-matter paragraph following the opinion paragraph

D. An other-matter paragraph before the opinion paragraph

The answer is “C” in an Other matter ‘following’ the opinion. I thought the answer would be “D” other matter with a basis ‘before’ the opinion paragraph. Can I get an explanation on this? For all those using Roger CPA as a study guide, he clearly states on section 6 pg 6, that Inconsistency (or change in accounting principle as referred to in his lecture) warrants a qualified or adverse “basis before” depending on materiality. Help?

[ruggercpa2b]

I ran into this question yesterday when I was studying. In my Wiley notes it says “When an auditor determines that the inconsistency is justified you issue an unmodified opinion with an emphasis of matter paragraph added after the opinion paragraph to emphasize the inconsistency”

Looking at the question, I guess we assume that the inconsistency is justified since they don't state that it caused a material misstatement.

(I hate Audit!).

AUD - NINJA in Training
BEC - NINJA in Training
FAR - NINJA in Training
REG - NINJA in Training

AUD - 1/6/18
FAR - TBD
REG - TBD
BEC - TBD

AUD - 73, 72 retake 7/2/2016
BEC - 8/20/2016
REG - TBD
FAR - TBD

I am so ready for this nightmare to be over. Been at this way too long.

[Anonymous]

I'm pretty sure it's an emphasis of matter paragraph after opinon.

EOM Paragraph is used to describe items that are included in the FS or notes that are critical for the reader in understanding the financial statements. A change in Accounting principle would have already been disclosed.

Other matter paragraph items are not included in the FS.

1) Basis of opinion

2) Opinion

3) Emphasis of matter

4) Other Matter

(E before O, but don't confuse with O in Opinion)

[Anonymous]

Doing further research through the Roger Textbook, it addresses a change in accounting principle in which the auditor determines if the change is justified, conforms with appropriate framework, disclosures are appropriate, and/or preferable justification for the change. In this situation, the auditor issues a unmodifed with an emphasis of matter (after) the opinion. When the auditor is unable to determine that the above qualifications are met, the auditor issues a qualified or adverse. in which case it is presented with a “basis before” the opinion.

Thanks RuggerCPA, you were right!

[kahtwoloo]

Emphasis of matter and other matter paragraphs go after the opinion, period, in that order if they're both there.

The basis for modifying opinion or whatever it's called goes before the opinion if it's necessary to change it.

BEC-51,71,70,77
AUD-50,62,68 (retake july)
REG-55
FAR-15(didnt study)

[mw798]

Like the above poser stated, emphasis of matter or other matter always go after the opinion paragraph. Becker is pretty clear on this.

[Author]

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