Audit Risk

Question 1

Best sources of information for a company’s financial systems

Answer 1

1. Company’s system procedure manual
2. Internal audit’s notes
3. Inquiries from company staff

Question 2

If the executive is dominant, poor internal controls and unusual transactions, what’s up?

Answer 2

Increased audit risk

Question 3

Qualitative inherent risk factors

Answer 3

1. Complexity
2. Subjectivity
3. Uncertainty
   NOT Materiality

Question 4

If risk is closer to upper end of spectrum of IR, what kind of risk is it?

Answer 4

Significant Risk

Question 5

Sale or return basis

Answer 5

Record sale if wholesalers made a sale otherwise nope.