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Dear sir,
Could you please give reason why this statement is False – Auditor should qualify their audit report if a client changes an accounting policy.
Thank you
An entity is permitted to change an accounting policy only if the change:
(1) is required by a standard or interpretation; or
(2) results in the financial statements providing reliable and more relevant information about the effects of transactions, other events or conditions on the entity’s financial position, financial performance, or cash flows. [IAS 8.14]Provided all disclosures about the change are made all is well. Changes in acounting polices are retrospective. Retrospective application means adjusting the opening balance of each affected component of equity for the earliest prior period presented and the other comparative amounts disclosed for each prior period presented as if the new accounting policy had always been applied.
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