If the Lower Assessed Level of Control Risk Approach Preliminary

question 43

Multiple Choice

If the lower assessed level of control risk approach preliminary audit strategy is used, the planned level of substantive procedures will be:

• A) at the lower level.
• B) moderate or high.
• C) at the higher level.
• D) high or very high.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary by income level, type of income, or legal entity.

CCA Tax Shield

A deduction that Canadian businesses can claim for the depreciation of tangible property, reducing taxable income.

After-Tax Annual Lease Payment

The amount of lease payments due each year after accounting for the tax effects.

After-Tax Discount Rate

The discount rate after adjusting for taxes, used to evaluate investments and their future cash flows after tax implications.