An Entity Operates in a Highly Regulated Industry with Special

question 29

Multiple Choice

An entity operates in a highly regulated industry with special, legislated reporting requirements, with which it has complied. However, this has resulted in it not complying with the requirements of some Australian Accounting
Standards. Note 1 to the accounts states that the accounts are prepared in conformity with both the special legislated
Reporting requirements and the Australian Accounting Standards. What type of audit opinion should be issued?

• A) An adverse opinion.
• B) A qualified opinion.
• C) An unmodified opinion with regards the special legislation and a qualified opinion with regards the departure from Australian Accounting Standards.
• D) An unmodified opinion with an Emphasis of Matter paragraph.

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Definitions:

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard cost of variable overhead allocated for the actual production level.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected (standard) variable overhead based on actual production levels.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard overhead estimated, based on the actual level of activity.

Variable Overhead Efficiency Variance

The difference between the actual variable overhead incurred and the standard variable overhead based on the actual level of activity, reflecting efficiency in using overhead resources.