If a company made a high tax provision for the prior year and made a over provision adjustment in the current year, what is the audit risk involve in this kind of issue?
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Tax Provision
11y ago#1Adjustments are expected for provisions since, by definition, the amount isn't certain.
Auditors ahould checkthat any provision is reasonble. For example, check the client's tax calculations. If there had been a material error made in the previous year, then that would have to be explained in this year's FS.
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