Chapter 1, Problem 36DQ

The IRS utilizes different audits depending upon the circumstances. I have listed 4 different scenarios. Please identify the type of audit that the IRS will likely use. Only provide one type of audit per scenario, the best option for the IRS. a. Professor Abbie B. Comey had a large amount of itemized deductions and the IRS would like to see documentation of these deductions. b. Trumff Corporation is a publicly traded corporation and has many transactions and many of them are very complex. The transactions, with large tax consequences, has reduced the tax liability of the corporation to $750. It is a large national chain of hotels headquartered in Florida. c. Ivanna and Jarry make face masks for the rich and famous, resulting in an income from their small homebased business of $75,000 in 2020. A few items were noted on the tax return by the IRS, relating to the homebased mask making business. d . Joey and Jilly sold some investments that sparked the interest of the IRS. As a result,…

Explain what is meant by determining the degree of correspondencebetween information and established criteria. What are the information and establishedcriteria for the audit of Jones Company’s tax return by an internal revenue agent? Whatare they for the audit of Jones Company’s financial statements by a CPA firm?

What 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 audits

Mrs.​ Hubbard, a mother of​ two, has been selected for an audit. Advise her on what to do to prepare for the audit and what to do if the audit does not turn out favorably.       Question content area bottom Part 1 To prepare for the​ audit: ​(Select all that​ apply.)     A. Mrs. Hubbard should hire an accountant or tax​ attorney, if necessary.   B. Mrs. Hubbard should anticipate probable questions and develop responses.   C. Mrs. Hubbard should gather all supporting documents.   D. Mrs. Hubbard should reexamine the areas where the IRS raised questions.

Which non-audit service may be provided to an SEC audit client?   A- )Preparing the annual tax returns for review and approval by the client.   B- )Designing the future state operating model for its finance and accounting functions.   C- )Performing a valuation to support the client’s legal claim.   D- )Developing, managing and executing portions of its internal audit plan.

A major responsibility of the Government Accountability Office is to audit taxpayers’ returns to determine whether they have complied with the tax laws Select one :- a_ true b_ falus

An official IRS statement issued by the National Office that provides an interpreation of how the tax law applies to a hypothetical fact scenario is:  A. Revenue Ruling B. Field Service Advice C. Private Letter Ruling  D. Technical Advice Memorandum

Which of the following types of audit evidence provides the least assurance of reliability? A. Receivable confirmations received from the client's customers B. prenumbered receiving reports completed by the client's employees C. Prior months' bank statements obtained from the client D. Municipal property tax bills prepared in the client's name.

Which of the following is true if an auditor performs nonaudit services for a governmententity?a. The scope of the audit must be reduced so that the auditor does not audit the area forwhich the nonaudit work was performed.b. The auditor is prohibited from providing nonaudit work in areas directly related to theproduction of accounting information.c. The senior members of the government entity must document their review of the nonaudit service and indicate why it is appropriate for the auditors to perform this service.d. The scope of the audit cannot be reduced because the nonaudit work was performed bythe public accounting firm.