In the Audit of an Individual's Tax Return,the Criteria Used

question 59

Multiple Choice

In the audit of an individual's tax return,the criteria used would be

• A)an accounting framework.
• B)the Income Tax Act.
• C)the client's policies for taxable income.
• D)the auditor's judgment.

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Definitions:

Business Model Test

The asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows.

Cash Flows Characteristics Test

The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest.

Financial Asset

An intangible asset deriving value due to a contractual claim, such as cash, stock, bonds, and bank deposits.

Objective Evidence

Objective evidence refers to information, facts, or data that can be quantifiably measured or verified, uninfluenced by feelings, interpretations, or bias.