When the Preliminary Audit Strategy Calls for the Primarily Substantive

question 24

True/False

When the preliminary audit strategy calls for the primarily substantive approach, planned detection risk should be set at moderate or high.

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Definitions:

CCA Class

A classification in Canadian tax law, standing for Capital Cost Allowance, that determines the depreciation rate for various types of property for tax purposes.

Fixed Assets

Long-term tangible assets that are used in the operations of a business and are not expected to be consumed or converted into cash in the short term.

CCA Pool

A grouping method for depreciating assets in a way that combines similar assets for the purposes of calculating capital cost allowance for tax purposes.

Marginal Tax Bracket

The tax rate that applies to the last dollar of an individual's income, used to determine the tax impact of additional income.