If There Have Been No Changes to a Control Which

question 29

Multiple Choice

If there have been no changes to a control which a previous audit has found to be working effectively:

• A)An auditor must still test the controls and not place reliance on the prior year's testing.
• B)An auditor must still test the controls but not to the same extent as the prior year's testing.
• C)An auditor can rely on the prior year's work and not test controls in the current year.
• D)An auditor can rely on the prior year's work but should test the controls every few years.

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Definitions:

Federal Taxes

Federal taxes are financial charges imposed by the national government on income, business profits, sales, and other forms of economic activity.

State Taxes

State taxes are financial charges imposed by individual states on income, property, sales, and other activities, varying widely between different states.

Local Taxes

Taxes imposed by local governments, such as cities or counties, which can include property taxes, sales taxes, and income taxes.

W-2

The form that an employer must send to an employee and the IRS at the end of the year, which reports the employee's annual wages and taxes withheld.