Tax Audit Pakistan MCQs 2026

In Tax Audit Pakistan, Appeal against tax audit primarily means

1. A no right of appeal ✓
2. B only FBR internal memo ✓
3. C appeal to ICAP only ✓
4. D taxpayer may appeal to Commissioner Appeals and higher forums ✓

Tax Audit Pakistan: Alternative dispute resolution tax can be defined as

1. A never available in Pakistan ✓
2. B only criminal courts ✓
3. C only international arbitration always ✓
4. D ADR mechanisms to settle audit disputes without prolonged litigation ✓

Which statement about Advance tax reconciliation is correct

1. A advance tax ignored in audit ✓
2. B auditor verifies advance tax payments against final liability ✓
3. C only penalty section reviewed ✓
4. D no reconciliation required ✓

Tax Audit Pakistan: Field formation tax audit can be defined as

1. A only Islamabad headquarters audits ✓
2. B only foreign embassies ✓
3. C FBR field offices conduct desk and field audit of taxpayers ✓
4. D never field visits ✓

In Tax Audit Pakistan, Documentation for tax audit primarily means

1. A no records required for companies ✓
2. B maintaining accounts vouchers bank statements and tax returns ✓
3. C only verbal records ✓
4. D destroy all after filing ✓

Tax Audit Pakistan: Penalties after tax audit can be defined as

1. A no penalties ever ✓
2. B only reward for underpayment ✓
3. C additional tax and penalties for concealment or default ✓
4. D penalty only on auditor ✓

Which statement about Benami transaction audit link is correct

1. A benami law unrelated to tax ✓
2. B only property never income ✓
3. C never investigated ✓
4. D FBR and other agencies may trace benami assets in tax cases ✓

Tax Audit Pakistan: Corporate tax audit issues can be defined as

1. A only employee count reviewed ✓
2. B only logo design fees ✓
3. C depreciation admissibility head office expenses and inter-company charges common areas ✓
4. D never examine financial statements ✓

A key aspect of Statute of limitations tax audit is that it involves

1. A unlimited forever always ✓
2. B generally five years from end of tax year subject to exceptions ✓
3. C only thirty days ✓
4. D only one day after filing ✓

Tax Audit Pakistan: Tax audit notice can be defined as

1. A no notice required FBR enters freely always ✓
2. B only phone call sufficient always ✓
3. C notice optional for all ✓
4. D taxpayer served notice to produce accounts and records ✓

Sales tax audit overlap is best described as

1. A same as income tax always one audit ✓
2. B separate audit under sales tax law by FBR ✓
3. C never conducted in Pakistan ✓
4. D only provincial never federal ✓

In Tax Audit Pakistan, Tax audit vs statutory audit primarily means

1. A identical purpose and report ✓
2. B statutory auditor always settles tax liability ✓
3. C tax officer signs audit opinion on FS ✓
4. D tax audit for tax compliance statutory for shareholder assurance ✓

A key aspect of Selection for tax audit is that it involves

1. A FBR uses risk-based computer ballot and parameters ✓
2. B random only with no criteria ever ✓
3. C all taxpayers exempt ✓
4. D only salaried never audited ✓

Best judgment assessment in the context of Tax Audit Pakistan refers to

1. A never used in practice ✓
2. B FBR may estimate income if taxpayer fails to maintain records ✓
3. C only for large multinationals ✓
4. D requires taxpayer consent always ✓

Withholding tax audit is best described as

1. A verifying deduction and deposit of tax at source ✓
2. B withholding never audited ✓
3. C only corporate tax rate audit ✓
4. D only property tax ✓

Tax audit FBR in the context of Tax Audit Pakistan refers to

1. A same as company statutory audit report ✓
2. B examination under Income Tax Ordinance 2001 to verify correct income reporting ✓
3. C only sales tax never income tax ✓
4. D voluntary hobby only ✓

Tax Audit Pakistan: Transfer pricing audit can be defined as

1. A only domestic cash sales ✓
2. B ignore all related parties ✓
3. C only payroll matters ✓
4. D examining related party cross-border transactions at arm length ✓

Which statement about Tax audit of banking transactions is correct

1. A s116 and withholding provisions on cash and banking ✓
2. B bank transactions never reviewed ✓
3. C only export invoices ✓
4. D only import GD only ✓

A key aspect of Amnesty and audit is that it involves

1. A amnesty always prevents any future audit forever ✓
2. B never any amnesty scheme in Pakistan ✓
3. C prior amnesty schemes may affect reopening depending on law at time ✓
4. D amnesty replaces all tax law permanently ✓

Tax Audit Pakistan: Tax audit of NGOs can be defined as

1. A non-profit entities audited for exemption compliance and unrelated business ✓
2. B NGOs never audited ✓
3. C all income always exempt without review ✓
4. D only members clubs exempt from all law ✓