This chapter describes ComUS’s change in accounting principle from the doubledeclining-balance depreciation method to the straight-line method. ComUS argues that its income statement computed using the straight-line method is more useful. This change in accounting princi¬
ple adds $56,000 to net income for year 2005. As this company’s auditor, you must review the decision to change the accounting principle. You review the equipment in question and learn that it is a piece of high-tech equipment whose risk of obsolescence in the near future is high. You also are aware that management receives year-end bonuses based on net income.
Required As the auditor, would you support the change in depreciation method or ask management to continue using the double-declining-balance method? Justify your response.