Firms must disclose changes in accounting methods that could affect the comparability of the current financial statements to those of previous years.

Question

Quizplus · Accepted Answer

This statement is true according to the accounting principle of consistency, which requires companies to use the same accounting methods and procedures from one period to the next in order to ensure comparability of financial statements. Any changes in accounting methods must be disclosed in order to make it clear to readers of the financial statements that there may be differences in how the information is presented and analyzed.

Firms Must Disclose Changes in Accounting Methods That Could Affect