Question

Which of the following changes affect the comparability of financial statements but not the consistency and therefore, do not have to be included in the auditor's report?

1) Error corrections not involving principles
2) Changes in accounting estimates
3) Variations in the format and presentation of financial information
4) All of the above

Answer 1

Out of the given options, the only change that affects comparability of financial statements but not consistency and do not have to be included in the auditor's report is 3) Variations in the format and presentation of financial information.

Step-by-step explanation:

Error corrections not involving principles and changes in accounting estimates both affect both comparability and consistency of financial statements, and therefore, need to be included in the auditor's report.

On the other hand, variations in the format and presentation of financial information do not affect the underlying principles or policies and can be considered as a matter of presentation preference, rather than a change in accounting treatment.