What are the information and established criteria for the audit of Jones Company’s tax return by an internal revenue agent? What are they for the audit of Jones Company’s financial statements by a CPA firm?
Provide the information and established criteria for audit of Company J’s tax return by the internal revenue agent and also explain the matters that are considered for audit of Company J’s financial statement by CPA firm.
Explanation of Solution
Information should be available in verifiable form and maintain the standards that are required by the auditor to evaluate the information. The information to be received for Company J tax return is from the federal tax returns that are filed by the company, moreover the criteria for establishment are provided by the Internal Revenue code and its interpretations. Whereas, financial statement of Company J are audited by the criteria provided by Country U GAAP or IFRS.
Want to see more full solutions like this?
Chapter 1 Solutions
AUDITING+ASSURANCE 12MONTH ACCESS CARD
- KPMG is the auditor for an IESBA public interest entity audit client. Which non-audit service is permitted for this type of audit client? Designing a technology system for financial reporting that generates information significant to the accounting records. Preparing annual tax returns subject to review by the client and appropriate assessment of threats and safeguards. Valuations that might create a self-review threat. Tax calculations for the purpose of preparing the accounting entries included in the financial statements on which the firm will express an opinion.arrow_forwardWhich of the following users of accounting verifies accounting information to check the Tax compliance by the companies? a. Tax authority b. Regulatory agencies c. Management d. Creditorsarrow_forwardthe attestation by an auditor is a? A) systemic and detailed information of a firms accounting records B) compilation of corporations adjustments and closing entries C) Preparation of a firms corporate tax return D) Affirmation of the accurate presentation of.arrow_forward
- This branch involves the preparation of tax returns and the rendering of tax advice to clients, such as determination and verification of tax consequences, the effect of taxes in the business operations, tax minimization through legal means, and the like. Select one: a. Financial accounting b. Auditing c. Fiduciary accounting d. Tax accounting Which of the following would be classified as external users of financial statements? Select one: a. The creditors and stockholders of the company b. The company marketing managers c. The controller of the company and a company's stockholders d. Stockholders and management of the company Accounting involves communication. Select one: a. False b. Truearrow_forwardThe main portion of an independent auditor’s work in expressing an opinion on financial statements consists of a. Obtaining and examining sufficient appropriate evidence b. Examining compliance with tax laws c. Studying and evaluating internal control d. Comparing client’s total accountabilities with its actual assets as of the end of the reporting periodarrow_forwardWhat are the primary types of tax audits conducted by taxing authorities? a) Random audits and targeted audits b) Field audits and desk audits c) Pre - filing audits and post - filing audits d) Internal audits and external auditsarrow_forward
- An attestation engagement is one in which a CPA is engaged to: A. Issue a written communication expressing a conclusion about the reliability of a written assertion that is the responsibility of another party. B. Provide tax advice or prepare a tax return based on financial information the CPA has not audited or reviewed. C. Testify as an expert witness in accounting, auditing, or tax matters, given certain stipulated facts. D. Assemble prospective financial statements based on the assumptions of the entity's management without expressing any assurance.arrow_forwardWhat is the purpose of an audit in accounting? How does it differ from other forms of accounting services such as consulting or tax preparation?arrow_forwardWhen a CPA knows that a tax client has skimmed cash receipts and not reported the incomein the federal income tax return but signs the return as a CPA who prepared the return, theCPA has violated which of the following AICPA rules of conduct?a. The Confidential Client Information Rule.b. The Integrity and Objectivity Rule.c. The Independence Rule.d. The Accounting Principles Rulearrow_forward
- The senior auditor of Probiz Ltd was in the process of reviewing the board minutes of Raymars Ltd as the auditor you are concerned about the possibility of contingent liabilities resulting from income tax disputes. Discuss the procedures you could use for an extensive investigation in this area.arrow_forwardwhy would an auditor ensure that all revenue-related disclosures are made in the financial statementsarrow_forwardWhat is the primary purpose of internal controls in an Accounting Information System (AIS )? a) To generate financial statements b) To ensure data accuracy and integrity c) To facilitate decision-making processes d) To comply with tax regulationsarrow_forward
- PFIN (with PFIN Online, 1 term (6 months) Printed...FinanceISBN:9781337117005Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage LearningPfin (with Mindtap, 1 Term Printed Access Card) (...FinanceISBN:9780357033609Author:Randall Billingsley, Lawrence J. Gitman, Michael D. JoehnkPublisher:Cengage Learning