Which of the following statements is incorrect? Not many companies in Australia have operations in both Australia and overseas locations. The financial statements of an Australian company may be prepared in Australian dollars and translated into a foreign currency for presentation purposes. The financial statements of an entity may be recorded in a foreign currency and translated into Australian dollars for the purpose of combining those statements with the financial statements of a related Australian company. The relevant accounting standard applied in translating financial statements into another currency is AASB 121/IAS 21 The Effects of Changes in Foreign Exchange Rates.