An entity changed from the straight-line method to the declining balance method of depreciation for all newly acquired assets. This change has no material effect on the current year's financial statements, but is reasonably certain to have a substantial effect in later years. If the change is disclosed in the notes to the financial statements, the auditor should issue a report with a(an):

Question

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Choice "C" is correct. If an accounting change has no material effect on the financial statements in the current year, but a material future effect, the auditor must ensure that the change is disclosed in the footnotes whenever the financial statements of the change period are presented, but does not have to recognize the change in the current year's audit report. Choice "A" is incorrect. Accounting changes that are accounted for properly do not result in qualified opinions. Choices "B" and "D" are incorrect. A consistency modification (explanatory paragraph) is not necessary when the effect of a change is immaterial.

An Entity Changed from the Straight-Line Method to the Declining