Your Client Is Not Using Either ASPE or IFRS

question 53

Multiple Choice

Your client is not using either ASPE or IFRS. Instead, it is using current value accounting with no use of historical cost, because your client is in a country with about 50% inflation per year. Local legislation requires that all resident organizations use current value accounting. How do these events affect the independent auditor's report?

• A) The auditor would issue a standard unqualified auditor's report.
• B) The auditor would use an emphasis of matter paragraph to explain that the financial statements are prepared in accordance with local legislation.
• C) The auditor would use an other matter paragraph to explain that the financial statements are prepared in accordance with local legislation.
• D) The auditor would state in the opinion paragraph that the financial statements were prepared in accordance with the local legislation.

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Definitions:

Autonomy

The right or condition of self-government, especially in the context of individual moral, ethical, or personal decisions.

Absolute

A term typically used to describe something that is complete or total, often without limitation or qualification.

Infringed

To encroach upon someone’s rights or freedoms, or breach a law or agreement.

Reasonable Steps

Actions or measures that are considered sensible and proportionate in a given situation to achieve a specified outcome.