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 has no material effect on the comparability of the financial statements, the auditors are not required to refer to consistency in the report. Therefore, the best choice is option C, which states that the auditors should not refer to consistency in the report. Options A and D are incorrect because referring to the change in an emphasis-of-matter paragraph or opinion paragraph would be misleading since the change does not materially affect comparability. Option B is also incorrect because the auditors should not express a preference for one accounting principle over another unless it is clearly required by GAAP.

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