Buổi 5: Audit Materiality + Fraud, Law and Regulations

Which of the two items should be tested?

• 1. A. Neither 1 nor 2

• 1. B. Both 1 and 2

• 1. C. 1 only

• 1. D. 2 only

2. A starting point for determining materiality is to apply a percentage to a chosen benchmark. Estate Co is a property development company.

Which of the following benchmarks would be the most appropriate starting point for determining materiality for Estate Co?

• A. Profit

• B. Assets

• C. Revenue

• D. Cashflow

In which of the following ways can internal audit help management to prevent and detect fraud?
(More than one answer)

• 1. 1.In deterring fraud by evaluating the adequacy and effectiveness of internal controls

• 1. 2. By designing effective and robust internal controls to detect error and fraud

• 3. 3.By evaluating errors to determine if they could be an indication of fraud

ABC Corporation is a multinational company operating in the consumer goods industry. As the auditor for ABC Corporation, you are conducting the audit planning and considering the various aspects of corporate governance. During your initial risk assessment, you identify the following corporate governance practices at ABC Corporation: The CEO also serves as the Chairperson of the Board of Directors; The company has established an independent audit committee.

• There is a lack of diversity in the composition of the Board, with all members having similar professional backgrounds. ABC Corporation has implemented a whistleblower hotline to report unethical behaviour.

Which corporate governance principle does this initiative primarily support?

• 1. Accountability

• 1. Transparency

• 1. Fairness

• 1. Integrity

Considering the information on XYZ Corporation, what is the primary type of risk associated with the factors mentioned?

• 1. Control risk

• 1. Inherent risk

• 1. Detection risk

• Business risk