Final answer:
It is false that changes in accounting estimates require a modified audit report with a consistency paragraph. Such changes are common and, if material, should only be disclosed in the financial statement notes. A modified audit report is for disagreements or scope limitations.
Step-by-step explanation:
The statement that 'changes in accounting estimates require the auditor to issue a modified audit report with a consistency paragraph inserted after the opinion paragraph' is false. Changes in accounting estimates are a normal part of the accounting process as new information becomes available, and they do not necessarily imply inaccuracies in prior period financial statements. Instead of modifying the audit report or adding a consistency paragraph, an auditor would review the change to ensure it's appropriately accounted for and disclosed by management in accordance with the applicable financial reporting framework. If the change is material, it should be disclosed in the notes to the financial statements, but this alone would not necessitate a modification of the auditor's opinion. A modified audit report typically arises when there are exceptions, such as a disagreement with management over the application of accounting principles or limitations in the scope of the audit.