RTRP - IRS Registered Tax Return Preparer Test

Answer: C - Complete financial statements are prepared at the year-end. Drafts are made throughout the financial year. An audit cannot be performed unless the financial statements are prepared and available. Therefore, an audit is performed after the financial year-end. However, on-field inspections and similar audit procedures may start during the latter part of the financial year of an entity. This is to obtain a better understanding of the entity and the internal controls in place. However, a full-fledge audit always starts after the financial year-end.