Which of the Following Would Be Most Likely to Be

question 42

Multiple Choice

Which of the following would be most likely to be an appropriate addressee for an audit report?

• A)The shareholders of the corporation whose financial statements were examined.
• B)A third party who requested that a copy of the audit report be sent to her.
• C)The president of the corporation whose financial statements were examined.
• D)The chief financial officer.

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Definitions:

Taxable Income

The portion of income that is subject to taxation after all allowances, deductions, and exemptions are considered.

Book Income

The income reported by a corporation for financial reporting purposes, which may differ from taxable income.

Federal Income Tax

A tax levied by the U.S. government on the annual earnings of individuals, corporations, trusts, and other legal entities.

Earnings and Profits

A measure of a corporation's ability to pay dividends to its shareholders, calculated for tax purposes.