If the Translation Process Is Sound, It Should

question 9

Multiple Choice

If the translation process is sound, it should:

• A)​provide information that is compatible with the expected economic effects of rate changes.
• B)​reflect in the financial statements the financial results of the company in conformity to the accounting principles of the country in which the subsidiary is located.
• C)​result in translation adjustments that are relatively consistent in amount.
• D)​None of the above is correct.

---

Definitions:

Piercing

Piercing, often related to "piercing the corporate veil," refers to the legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders or directors.

Corporate Veil

A legal concept that separates the actions and liabilities of a corporation from those of its shareholders or directors.

Personal Liability

The legal responsibility of an individual to satisfy debts or obligations from personal assets, not protected by limited liability through a corporate structure.

Incorporators

Individuals involved in forming a corporation, who sign the articles of incorporation and may act as temporary directors until a board is elected.