Your Client Has Two Sets of Financial Statements

question 37

Multiple Choice

Your client has two sets of financial statements. One set is in compliance with IFRS, while the other set is in compliance with local tax legislation and will be used only with the tax returns. How do these events affect the independent auditor's report?

• A) The auditor would use an unqualified audit report for both financial statements, with an emphasis of matter paragraph that describes to readers the nature of the other set of financial statements.
• B) The auditor would use a standard unqualified auditor's report for both financial statements, labeling the auditor's report "for IFRS only" and "for tax purposes only."
• C) The auditor would use an unqualified audit report for both financial statements, with an other matter paragraph that describes to readers the nature of the other set of financial statements.
• D) The auditor would use a qualified audit report, as the client may not have two different sets of financial statements.

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Definitions:

Behavioral Theorists

Researchers or clinicians focusing on how behaviors are acquired or modified based on response to environmental stimuli.

Reinforcement

In behavioral psychology, it is a concept where a behavior is increased or strengthened by the consequence that follows it.

Punishment

A response aimed at reducing undesirable behavior by imposing negative consequences.

Abnormal Behavior

Actions, thoughts, or emotions that are unusual within a person’s own culture, cause personal distress, or interfere with a person’s ability to function in daily life.