The effect of ITF transactions should be removed:
A) after the conclusion of the audit.
B) on a surprise basis.
C) by inputting adjustment transactions.
D) by the internal audit group.

Question

Quizplus · Accepted Answer

The most appropriate method for removing the effect of ITF transactions is by inputting adjustment transactions. This can be done through a systematic process of correcting the discrepancies identified. This method ensures that the financial statements are accurate and free from any misstatement due to the inclusion of ITF transactions. The other options, such as removing the effect on a surprise basis or through the internal audit group, may not be as effective or reliable. After the conclusion of the audit, the auditor would not make any adjustments to remove the effect of ITF transactions since it is their duty to report on the financial statements as they are presented to them.

The Effect of ITF Transactions Should Be Removed