When there has been a change in accounting principles, but the effect of the change on the comparability of the financial statements is not material, the auditors should
A)refer to the change in an explanatory paragraph.
B)explicitly concur that the change is preferred.
C)not refer to consistency in the report.
D)refer to the change in the Basis for Opinion Section.

Question

Quizplus · Accepted Answer

If the effect of the change on the comparability of the financial statements is not material, the auditors should not refer to consistency in the report since the financial statements remain comparable. Therefore, choice C is the best answer. However, if the effect of the change on the comparability of the financial statements is material, the auditors should refer to the change in the Basis for Opinion Section.

When There Has Been a Change in Accounting Principles, but the Effect