The accounting and auditing literature discusses several different types of accounting changes. For each of the changes listed below (a. through e.), indicate whether the auditor should add a paragraph to the audit report, assuming that the change had a material effect on the financial statements and was properly justified, accounted for, and disclosed.
Assume that the organization is a U.S. nonpublic company.
a. Change from one GAAP to another GAAP
b. Change in accounting estimate not affected by a change in accounting principle
c. Change in accounting estimate affected by a change in accounting principle
d. Correction of an error
e. Change from non-GAAP to GAAP (a special case of correction of an error)