In reported speech, do we change time expressions in the case where there is a backshift (i.e., when the reporting verb is in the present tense)?
In conversational English, speakers often employ both past and present tense. For instance, when they speak to friends and acquaintances about something that has happened, they may begin appropriately in the past tense. However, in their effort to involve the listener in their tale, as well as to create a sense of immediacy, speakers do, in fact, often resort to the present tense in recounting actions and dialogues that are part of this tale. For conversation, then, this use of the present has become acceptable as it is part of "storytelling" as the speaker transports the listener back in time to when the action originally occurred.
This use of the present tense to create action that, then, more involves the listener is not unlike the use of the literary present tense. This use of the present is employed by writers who recount or analyze literary works. In such literary examinations, the purpose of using the present tense is to convey that the discussion involves the present moment. With the speakers who relate a tale, they wish to involve their listeners in the feel, so to speak, of the action as it occurs in the flashback.