Under what circumstances an entity changes its Accounting Policy?

Answer 1

When they discover they have been ripped off. The current practices permitted the rip-off, so now they've got to "plug the hole." It could be cost accounting, it could be false payroll checks, it could be double-billing from suppliers; whatever it is, the hole's got to be plugged, or you will be out of business in no time. Like the local university, where the person writing the check request and the person writing the check were one and the same -- lost bunches of money before somebody got wise to that one.

Answer 2

When that policy isnt working any more, eg they are making no profit or not enough.