JJ Steel Ltd is a company that manufacturers various steel products for the export market. The company disclosed in its last financial report (year ended 30 September 2022) that its accounting policy regarding depreciation of production equipment was changed to a longer useful life with all other assumptions regarding the calculation of depreciation remaining the same. As an analyst of JJ Steel Ltd you believe this is not a justified change in accounting policy, and you calculate the current year impact (year ending 30 September 2023) is to reduce depreciation by $8m, with prior year depreciation reduced by $25m. The company tax rate is 30%.

A) Calculate the effect of the misstatement on shareholders equity, total assets and total liabilities balances as of 30 September 2022 and net profit for the year ending 30 September 2023.

B) Discuss whether it is possible for JJ Steel to change its depreciation policy with regards to existing non-current assets.