When there has been a change in accounting principles but its effect 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 opinion paragraph.

Question

Quizplus · Accepted Answer

When there has been a change in accounting principles, but it does not have a material effect on the comparability of the financial statements, the auditors should not refer to consistency in the report. This is because consistency is not affected, and therefore, there is no need to make any reference to it. Referring to the change in an explanatory paragraph or the opinion paragraph, or explicitly concurring that the change is preferred would not be necessary, as it does not have any material impact on the comparability of the financial statements. The auditors can still express an unmodified opinion on the financial statements without referring to the change.

When There Has Been a Change in Accounting Principles but Its