diff --git a/python/src/com/jetbrains/python/inspections/PyInitNewSignatureInspection.java b/python/src/com/jetbrains/python/inspections/PyInitNewSignatureInspection.java
index 28d1acfac914..514438769d17 100644
--- a/python/src/com/jetbrains/python/inspections/PyInitNewSignatureInspection.java
+++ b/python/src/com/jetbrains/python/inspections/PyInitNewSignatureInspection.java
@@ -54,22 +54,22 @@ public class PyInitNewSignatureInspection extends PyInspection {
     }
 
     @Override
-    public void visitPyClass(PyClass cls) {
-      if (!cls.isNewStyleClass()) return; // old-style classes don't know about __new__
-      PyFunction initOrNew = cls.findInitOrNew(false); // only local
+    public void visitPyFunction(PyFunction node) {
+      final String functionName = node.getName();
+      if (!PyNames.NEW.equals(functionName) && !PyNames.INIT.equals(functionName)) return;
+      final PyClass cls = node.getContainingClass();
+      if (cls == null) return;
+      if (!cls.isNewStyleClass()) return;
       final PyBuiltinCache builtins = PyBuiltinCache.getInstance(cls);
-      if (initOrNew == null || builtins.isBuiltin(initOrNew.getContainingClass())) return; // nothing is overridden
-      String the_other_name = PyNames.NEW.equals(initOrNew.getName()) ? PyNames.INIT : PyNames.NEW;
-      PyFunction the_other = cls.findMethodByName(the_other_name, true);
-      if (the_other == null || builtins.getClass("object") == the_other.getContainingClass()) return;
-      if (!PyUtil.isSignatureCompatibleTo(the_other, initOrNew, myTypeEvalContext) &&
-          !PyUtil.isSignatureCompatibleTo(initOrNew, the_other, myTypeEvalContext) &&
-          initOrNew.getContainingFile() == cls.getContainingFile()
-        ) {
-        registerProblem(initOrNew.getParameterList(), PyNames.NEW.equals(initOrNew.getName()) ?
+      final String complementaryName = PyNames.NEW.equals(functionName) ? PyNames.INIT : PyNames.NEW;
+      final PyFunction complementaryMethod = cls.findMethodByName(complementaryName, true);
+      if (complementaryMethod == null || builtins.getClass("object") == complementaryMethod.getContainingClass()) return;
+      if (!PyUtil.isSignatureCompatibleTo(complementaryMethod, node, myTypeEvalContext) &&
+          !PyUtil.isSignatureCompatibleTo(node, complementaryMethod, myTypeEvalContext) &&
+          node.getContainingFile() == cls.getContainingFile()) {
+        registerProblem(node.getParameterList(), PyNames.NEW.equals(node.getName()) ?
                                                       PyBundle.message("INSP.new.incompatible.to.init") :
-                                                      PyBundle.message("INSP.init.incompatible.to.new")
-        );
+                                                      PyBundle.message("INSP.init.incompatible.to.new"));
       }
     }
   }
diff --git a/python/testData/inspections/PyInitNewSignatureInspection/expected.xml b/python/testData/inspections/PyInitNewSignatureInspection/expected.xml
index a0d40b98624b..2326a36cfc78 100644
--- a/python/testData/inspections/PyInitNewSignatureInspection/expected.xml
+++ b/python/testData/inspections/PyInitNewSignatureInspection/expected.xml
@@ -6,6 +6,11 @@
     <problem_class severity="WARNING"/>
     <description>Signature is not compatible to __new__</description>
   </problem>
+  <problem>
+    <file>test.py</file>
+    <line>5</line>
+    <description>Signature is not compatible to __init__</description>
+  </problem>
   <problem>
     <file>test.py</file>
     <line>12</line>
diff --git a/python/testData/inspections/PyInitNewSignatureInspection/src/test.py b/python/testData/inspections/PyInitNewSignatureInspection/src/test.py
index 18f631349720..a0ebd20b9084 100644
--- a/python/testData/inspections/PyInitNewSignatureInspection/src/test.py
+++ b/python/testData/inspections/PyInitNewSignatureInspection/src/test.py
@@ -1,9 +1,9 @@
 class B(object):
-  def __init__(self): # ierror only once
-                pass
+  def __init__(self): # error
+    pass
 
-    def __new__(cls, x, y):
-              pass
+  def __new__(cls, x, y): # error
+    pass
 
 class A1(B):
     pass