Using Computer Assisted Audit Techniques (CAATs) Makes the Audit

question 64

Multiple Choice

Using computer assisted audit techniques (CAATs) makes the audit

• A) more comprehensive.
• B) more expensive.
• C) more efficient.
• D) both a and c

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Definitions:

Deferred Income Taxes

Taxes owed for the current period but not yet required to be paid, due to differences between financial accounting and tax reporting.

Temporary Difference

Differences between accounting income and taxable income that are expected to reverse in the future, affecting deferred tax calculations.

Permanent Difference

Transactions that cause a difference between the tax basis and the book value of assets and liabilities, which will not reverse over time.

Interperiod Tax Allocation

The process of allocating income taxes over different accounting periods due to temporary differences between financial accounting and tax reporting.