Final answer:
The statement is false; changes in an estimate, like a change in the estimated useful life of an asset, may affect comparability but not consistency and do not always require an explanatory paragraph in the audit report if properly disclosed.
Step-by-step explanation:
The question deals with accounting principles, specifically around changes in accounting estimates and their impact on financial reporting. When there is a change in an estimate, such as a revision of the estimated useful life of a depreciable asset, this does not violate the principle of consistency as it is not a change in accounting principle but rather an adjustment based on new information. Comparability, on the other hand, refers to the ability to compare the financial statements of a company from one period to another, and while changes in estimates do affect comparability, they are expected and understandable changes given that estimates can evolve with new information.
An explanatory paragraph in the audit report is not typically required for changes in estimates unless the change is material and not disclosed within the financial statements themselves. Disclosures are typically made in the notes to the financial statements to ensure users are aware of the changes and can understand their effects on the financials. Therefore, the statement is false; changes in estimates may impact comparability but do not inherently affect consistency or always require an explanatory paragraph in the audit report.