CAF-2 · Chapter 3 · Question 3 of 15
Your audit firm is requested to prepare calculations of current and deferred tax liabilities for an audit client that is classified as a Public Interest Entity (PIE). The calculations will be used to prepare accounting entries that are material to the financial statements. According to the ICAP Code of Ethics, what is the appropriate response?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) C) The firm shall not prepare these tax calculations unless it is an emergency situation.
Explanation
A firm shall not prepare tax calculations of current and deferred tax liabilities for a PIE audit client if the entries are material to the financial statements, except in emergency or highly unusual situations.
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