Final answer:
When there is a lack of consistent application of GAAP due to a new accounting pronouncement, an explanatory paragraph is required in the financial statements.
Step-by-step explanation:
The statement "When there is a lack of consistent application of GAAP due to a new accounting pronouncement, no explanatory paragraph is required" is false.
When there is a lack of consistent application of Generally Accepted Accounting Principles (GAAP) due to a new accounting pronouncement, an explanatory paragraph is required in the financial statements. This paragraph should explain the nature and effect of the change in accounting principles and provide relevant information to users of the financial statements.
For example, if a company adopts a new accounting standard that changes its revenue recognition policies, it must disclose this change in the financial statements to ensure transparency and allow users to understand the impact on the company's financial performance.