Which of the Following Statements Best Describes the Post-Audit Function

question 33

Multiple Choice

Which of the following statements best describes the post-audit function in the capital budgeting process?

• A)The post-audit should be performed before a purchase decision is made for a new capital budgeting project.
• B)The post-audit is a fairly simple process, primarily because it is easy to separate the operating results of one project from those of other related projects.
• C)The post-audit involves comparing the actual results of previous capital budgeting decisions with the forecasted results to identify and explain any differences.
• D)The results of a post-audit generally can be used to develop future cash flow forecasts for new capital budgeting projects that are 100 percent accurate.
• E)Because it is quite expensive to perform, the post-audit should always be considered a voluntary part of the capital budgeting process.

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Definitions:

Foreign Income Taxes

Taxes paid to a foreign government for income earned outside of the taxpayer's resident country.

U.S. Tax Liability

The total amount of tax owed to the United States government, including federal, state, and local taxes.

Foreign Tax Credit

A tax credit that reduces the tax liability of an individual or entity for certain taxes paid to foreign governments.

Form 1116

A tax document used to claim foreign tax credit that reduces double taxation by the United States on income earned abroad.