Write short notes on the Change in Accounting Policies

Auditing and Assurance Revision Questions and Answers

Answer:
Change in accounting policies:
 The consistency is also an accounting assumption. Therefore, the accounting policies should consistently be applied and followed from years to years.

 Change in accounting policy is permitted only if such change is to bring accounts in line with accounting standards, provisions of law or for better presentation of financial statements.

 When change in accounting policies or method is affected, the fact of such change and its impact on accounts must be disclosed.

 If change is made in the accounting policies which has no material effect on the financial statements for the current period but which is reasonably expected to have a material effect in later periods, the fact of such change should be appropriately disclosed in the period in which the change is adopted.



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