The auditor must know the client's capitalisation policies to determine whether acquisitions are treated:
A) in accordance with accounting standards.
B) consistently with those of the preceding year.
C) both A and B
D) none of the above

Question

Quizplus · Accepted Answer

Knowing the client's capitalization policies is important for the auditor to determine whether acquisitions are treated in accordance with accounting standards, as well as consistently with those of the preceding year. Therefore, both options A and B are correct. Option D can be eliminated as it is not correct.

The Auditor Must Know the Client's Capitalisation Policies to Determine