In the Audit of an Individual's Tax Return, the Auditor

question 2

Multiple Choice

In the audit of an individual's tax return, the auditor should demonstrate competence in the use of

• A) external databases that contain economic statistics.
• B) standard personal and corporate tax preparation software.
• C) the Income Tax Act and accompanying regulations.
• D) database management software for the use of client based research.

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Definitions:

Financial Distress

An instance wherein a business faces challenges or fails to satisfy its monetary debts to creditors.

Trade-off

The process of sacrificing one quality, quantity, or property to gain another.

Accounts Receivable

Money owed to a business by its clients for goods or services that have been delivered or used but not yet paid for.