Skip to content

CA Final · Advanced Auditing, Assurance and Professional Ethics · Professional Ethics & Liabilities of Auditors

An audit firm proposes to prepare the calculations of current and deferred tax for its listed audit client, Surya Motors Ltd., so that the client can record the related tax entries in its financial statements. Under Section 604 of the Code of Ethics (Volume II), how is this service described?

This is a tax calculation service. It involves preparing calculations of current and deferred tax liabilities or assets so that accounting entries supporting tax assets or liabilities can be made in the audit client's financial statements, which is how Section 604 of the Code describes it.

  1. AA tax calculation service, involving calculations of current and deferred tax liabilities or assets for preparing accounting entries supporting tax assets or liabilitiesCorrect
  2. BA tax planning service involving restructuring of the client's operations
  3. CA representation service before the tax tribunal
  4. DA valuation service for the client's fixed assets

Explanation

Section 604.7 A1 describes tax calculation services as the preparation of calculations of current and deferred tax liabilities or assets for the purpose of preparing accounting entries supporting tax assets or liabilities in the audit client's financial statements. The other options describe different services.

Did you get it right without looking?

One question tells you little. A timed set on Professional Ethics & Liabilities of Auditors shows your real accuracy, how long you take and where you lose marks.

Practise Professional Ethics & Liabilities of AuditorsFree diagnostic mock

More Professional Ethics & Liabilities of Auditors questions