One of the Reasons That an Auditor Must Be Competent

question 33

Multiple Choice

One of the reasons that an auditor must be competent is so that they can

• A)select the type and amount of evidence to accumulate.
• B)explain to staff how the bookkeeping should be done.
• C)record the transactions properly for the underlying records.
• D)capture the information properly in the computer files.

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Definitions:

Taxable Income

The amount of income subject to tax, after deductions and exemptions, as determined by tax laws.

Quarterly Dividends

These are dividends paid by a corporation to its shareholders every three months, or four times a year, representing a portion of the company's earnings.

Book Value

The net value of a company's assets minus its liabilities and intangible assets, often used as a measure of a company's actual worth.

Cash Dividend

A payment made by a corporation to its shareholders, usually in the form of cash, as a share of the company’s profits.