Umberto Levinson Has Performed a Test of Controls of a Flower

question 40

Multiple Choice

Umberto Levinson has performed a test of controls of a flower shop. He is trying to determine the timing of substantive procedures at year-end. Which factor will determine the
Timing of his audit procedures?

• A) timing of the year-end work
• B) audit risk
• C) inherent risk
• D) control risk

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Definitions:

Fiscal Year

A 12-month period that businesses and governments use for accounting purposes, which may or may not align with the calendar year.

Private Sector

The part of the economy that is run by individuals and companies for profit and is not under direct governmental control.

Excess Burden

The economic inefficiency that arises when market behavior is altered due to a tax or subsidy, leading to a loss in economic welfare beyond the tax collected or subsidy paid.

Tax Compliance

The degree to which taxpayers adhere to tax laws, including accurate reporting and timely payment of taxes.