Deck 2: Taxation and Auditing for Jims Jeans and Beyond

Question 1

Which of the following is considered when finalizing an audit team?

A)Team size
B)Orientation of the team members
C)Presence of conflict of interest
D)Skillset of each member
E)All of the above

Answer 1

All of the above

Question 2

Which of the following is attributed to giving integral role to the internal audit committees?

A)IFRS
B)Sarbanes-Oxley Act
C)ISA
D)IAS

Answer 2

Sarbanes-Oxley Act

Question 3

When does maintaining an audit trail become imperative during litigation?

A)Fact documentation testimony
B)Fact witness testimony
C)Fact plaintiff testimony
D)Bare fact testimony

Answer 3

Bare fact testimony

Question 4

If an underpayment of tax liability is established, then the fine imposed is based on:

A)The amount of tax left unpaid
B)The entire tax liability is considered for such purposes
C)The underpayment of tax
D)One-fourth of the amount underpaid

Question 5

Tax fraud cases are difficult to unearth because:

A)It involves money
B)It takes much time to settle the case
C)It is difficult to prove and establish the essence of tax evasion and fraud
D)Court is too busy with other criminal cases

Question 6

The difference between tax avoidance and tax evasion is:

A)Tax avoidance is permissible by law, whereas, tax evasion is a crime
B)Tax avoidance is punishable, whereas, tax evasion is allowed
C)Tax avoidance is manipulation of laws, whereas, tax evasion is lawful
D)Tax avoidance at a larger level refers to tax evasion