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Indicate which changes would require an explanatory paragraph in the audit report. O A. Changes in reporting entities, such a

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Answer: A.

Explanation : When entities bring changes in reporting due to inclusion of additional company in the combined statement then such event is required to be included in an explanatory paragraph in the audit report even though such event does not impact the consistency of the entity. Such event is disclosed emphasis of matter para of audit report.

An explanatory paragraph in the audit report is not needed when  CPA makes reference to the work of another auditor to indicate shared responsibility in an unqualified opinion.

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