Risk Assessment and Internal Control

Question 1

1. Which of the following is true regarding materiality?...

A) It is unaffected by nature of an item.

B) It is unaffected by requirements of law or regulations.

C) It is not a matter of professional judgment.

D) It is not always a matter of relative size. ✓

Question 2

2. The operations of a company are automated substantially. Which of the following statements is most appropriate in this respect?...

A) It results in complex business environment. ✓

B) It results in simple business environment and easier audit.

C) Automation has no relationship with complexity of business environment.

D) It results in simple business environment. However, it increases complexity of a...

Question 3

3. Who is responsible for maintaining effective internal financial controls?...

A) Statutory auditor

B) Audit Committee

C) Management ✓

D) Shareholders

Sample Questions: Auditing