As a Part of the Auditor's Responsibility for ________, the Auditor

question 36

Multiple Choice

As a part of the auditor's responsibility for ________, the auditor should review the preparation of at least one of each type of payroll tax form the client is responsible for filing.

• A) fraud awareness
• B) doing tests of balances
• C) doing tests of transactions
• D) understanding the client's internal controls

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Definitions:

Financing Activities

Transactions related to raising capital and repaying shareholders, including issuing equity and taking on loans.

Cash Flow Statement

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, dividing activity into operating, investing, and financing activities.

Treasury Stock

Shares that were once part of the outstanding shares of a company but were later reacquired by the company itself.

Deferred Tax Asset

A tax reduction or benefit that arises due to temporary differences between the book value and tax value of assets and liabilities, which can be used to offset future tax liabilities.