Accounting standard, Depreciation Accounting states that depreciation method applied for the calculation has to follow continuously unless a. it is required by statue or b. for the compliance with an accounting standard or c. for the more true and fair presentation of financial statement.

Therefore, the auditor must ensure that the change in method of depreciation on plant and machinery from SLM to WDV basis from the current year is made in accordance therewith. When such a change in the method of depreciation is made, depreciation is recalculated in accordance with the new method from the date of the asset coming into use.

Further, it should be ensured that the deficiency on change in method to be adjusted in the year of change by way of a charge to the Statement of Profit and Loss. The auditor may also ascertain that the change in the method and the effect thereof on the profits of the entity is quantified and disclosed. If it is not done by the management, the auditor has to bring it to the notice of the shareholders through