Question

It is not appropriate for the auditors' report to refer a reader to a financial statement note for details regarding a(an):

A. Change in accounting principle.
B. Limitation in the scope of the audit.
C. Uncertainty.
D. Related party transaction.

Answer 1

Referring a reader to a financial statement note for details is not appropriate for certain items in the auditors' report, including a change in accounting principle, a limitation in the scope of the audit, and a related party transaction. However, uncertainty can be appropriately addressed through reference to a financial statement note.

Step-by-step explanation:

Referring a reader to a financial statement note for details is not appropriate for a change in accounting principle, a limitation in the scope of the audit, and a related party transaction. These are significant items that should be disclosed in the auditors' report itself to ensure transparency and accuracy. However, uncertainty is a factor that can be appropriately addressed through reference to a financial statement note, as it provides additional information and explanations regarding the uncertainty.