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Corporate Governance and Auditing: Role of Auditors

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Questions and Answers

What is the primary objective of risk management?

To identify and control adverse risks (correct)
To prepare financial statements
To evaluate the audit committee's performance
To maximise profits and minimise costs

What is earnings management?

The manipulation of financial statements to achieve a particular outcome (correct)
A process of identifying and assessing risks
A system of internal control and risk management
An independent assurance and consulting activity

What is the role of an audit committee?

To manage earnings and report financial statements
To oversee financial reporting and risk management (correct)
To prepare internal control systems and classify risks
To perform external audits and consulting activities

What is the purpose of internal auditing?

To add value and improve an organisation's operations (A) Signup and view all the answers

What is the primary objective of internal control?

To minimise risks and improve governance (C) Signup and view all the answers

Why are financial statements prepared?

To provide a true and fair view of the organisation's financial position (B) Signup and view all the answers

What is the primary purpose of an independent auditor in an organisation?

To add credibility to the agent's conduct (B) Signup and view all the answers

Which of the following is a key aspect of Enterprise Governance?

Ensuring that risks are managed appropriately (A) Signup and view all the answers

What is the main focus of Corporate Governance?

Conformance to regulatory requirements (B) Signup and view all the answers

Which of the following is a key component of an organisation's internal control structure?

Risk management and internal audit (C) Signup and view all the answers

What is the primary objective of an organisation's financial reporting and disclosure regime?

To ensure conformance to regulatory requirements (D) Signup and view all the answers

What is the role of the chair of the board and top management in an organisation's Enterprise Governance?

To establish the organisation's accountability framework (A) Signup and view all the answers

What is the primary purpose of the audit function according to the concept of Baker and Owsen?

To provide assurance that the financial statements are correct (A) Signup and view all the answers

What is the role of internal audit in the 'Audit Trinity' concept?

To include corporate governance and accountability matters (C) Signup and view all the answers

What is the purpose of due diligence audits?

To identify potential risks in a business transaction (A) Signup and view all the answers

What is the role of accountants and auditors in ensuring internal control and risk management systems?

To provide assurance of integrity and reliability of internal control and risk management systems (A) Signup and view all the answers

What is the role of the audit committee in the 'Audit Trinity' concept?

To oversee the internal audit function (D) Signup and view all the answers

What is the objective of social auditing?

To ensure the company has adopted a responsible attitude to environmental and societal matters (A) Signup and view all the answers

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