The Third Phase of the Audit Involves Performing Audit Tests

question 56

Multiple Choice

The third phase of the audit involves performing audit tests. The primary purpose of this step is to obtain evidence about:

• A) the integrity of management.
• B) the effectiveness of management.
• C) the effectiveness of the internal control structure.
• D) the effectiveness and the integrity of management.
• E) the effectiveness of the internal control structure and the fairness of the financial statements.

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Definitions:

Federal Poverty Level

A measure used to determine eligibility for certain federal programs and benefits, based on income.

Premium Tax Credit

A refundable tax credit designed to help eligible individuals and families with low or moderate income afford health insurance purchased through the Health Insurance Marketplace.

Household Income

The total gross income before taxes of all household members over a certain age, typically used for financial assessments.

American Opportunity Tax

A credit that allows taxpayers to reduce their federal income tax based on qualified education expenses paid for themselves, a spouse, or a dependent.