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 emphasis-of-matter paragraph.
B) explicitly concur that the change is preferred.
C) not refer to consistency in the report.
D) refer to the change in the opinion paragraph.

Question

Quizplus · Accepted Answer

If the change in accounting principles does not have a material effect on comparability of financial statements, auditors should not refer to consistency in the report. This is because the comparability has not been affected and therefore there is no need to highlight the change. However, if the change could have a material impact on comparability, the auditors should either concur with the change explicitly or refer to it in an emphasis-of-matter paragraph within the report. If the change is so material that it affects the opinion of the auditors, then it should be addressed in the opinion paragraph.

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