Changes in an estimate, such as a change in the estimated useful life of an asset for depreciation purposes, affect consistency but not comparability, and therefore require an explanatory paragraph in the audit report.

Question

Quizplus · Accepted Answer

Changes in estimates do not affect consistency or comparability in a way that requires an explanatory paragraph in the audit report; they are a normal part of business operations and accounting practices.

Changes in an Estimate, Such as a Change in the Estimated