Which of the following accounting changes requires an emphasis-of-matter paragraph regarding consistency in a nonpublic company auditors' report?
A)A change in the estimated useful lives of a class of fixed assets.
B)A write-off of a patent because future benefits do not appear to exist.
C)A change from the straight-line method of depreciation to an accelerated method for a class of fixed assets.
D)A change in calculating bad debt expense from one percent to two percent of credit sales.

Question

Quizplus · Accepted Answer

A change from the straight-line method of depreciation to an accelerated method for a class of fixed assets requires an emphasis-of-matter paragraph in a nonpublic company auditors' report because it represents a change in accounting principle, requiring disclosure of the nature of the change, reasons for it, and its estimated effects. The other options do not represent a change in accounting principle and thus do not require an emphasis-of-matter paragraph.

Which of the Following Accounting Changes Requires an Emphasis-Of-Matter Paragraph