Inquiries of Client Personnel Are Not an Effective Means of Evidence

question 103

True/False

Inquiries of client personnel are not an effective means of evidence gathering by an auditor.

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Definitions:

Average Effective Tax Rate

The average effective tax rate is the actual percentage of their income that individuals or corporations pay in taxes, after all deductions and credits, across different jurisdictions.

Financial Asset

Any asset that is cash; an equity instrument of another entity; a contractual right to receive cash or another financial asset from another entity, or to exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable to the entity; or a contract that may be settled in the entity’s own equity instruments and is a non-derivative for which the entity may be obliged to receive a variable number of the entity’s own equity instruments, or a derivative that may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own equity instruments.

Marketplace Convention

Commonly accepted standards, norms, or practices adopted by a marketplace or industry.

Regulation

The act of controlling, guiding, or managing activities through rules or laws created by governments or regulatory bodies to achieve specific outcomes.