Terri Harrison, CPA, has discussed various reporting considerations with three of the entities she audits. The three entities presented the following situations and asked how they would affect the audit report.

a. One of the entities has changed its depreciation method on its machinery from straight line to double declining balance. Both Harrison and the entity agree that the new depreciation method better reflects the usage of the machinery in the manufacturing process. The entity agrees with Harrison that the change is material but claims that it needs disclosure only in the "Summary of Significant Accounting Policies" footnote to the financial statements, not in Harrison's report.