Performing Audit Tests of Balances (In-Person and Remotely)—Part 9, Auditing Income Taxes

Date: 2/5/2025
Time: 12:00 PM - 2:00 PM EST
CPE Credit: 2 hours

For most small to medium-size entities, auditing procedures will include the scheduling and calculating of deferred income tax expense, deferred tax assets and deferred tax liabilities. For this reason, a majority of these materials will be devoted to obtaining a basic understanding of SFAS No 109, Accounting for Income Taxes. These materials assume that readers have a basic knowledge of corporate income tax return preparation.

Ethic Interpretation No. 101-3 Non-attest Services, identifies income tax return preparation as a non-attest service which requires management’s oversight to prevent an auditor’s independence from being impaired. Accounting for income taxes is part of an entity’s process of financial reporting and is management’s responsibility. When an auditor performs the accounting for income taxes and proposes adjustments for current and deferred income tax expense, deferred tax assets and deferred tax liabilities, a client representative with suitable skill, knowledge or experience must be assigned to oversee, approve and take responsibility for the calculations and proposed adjustments.

Topics Covered

• Accounting and auditing for income taxes

Learning Objectives:

• Understand the basic principles of accounting for income taxes
• Understand the basic procedures for auditing income taxes
• Design and prepare the most efficient documentation of income taxes auditing procedures