Question 1

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

Accepted Answer

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 E

Question 2

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

Accepted Answer

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

Question 3

When does maintaining an audit trail become imperative during litigation?

Accepted Answer

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

Question 4

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

Accepted Answer

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

The difference between tax avoidance and tax evasion is:

Accepted Answer

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

Question 6

Tax fraud cases are difficult to unearth because:

Accepted Answer

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

Exam 2: Taxation and Auditing for Jims Jeans and Beyond