Risk Identification

AAA – Nov 2022 – L3 – SB – Q2 – Audit of Complex Entities

Evaluate auditors' responsibilities in fraud detection, financial misreporting, and appropriate audit procedures to mitigate misstatements.

Question

The Financial Controller (FC) of Poki Limited made an observation on the draft engagement letter sent by the external auditors to the company, an extract of which is as stated below:

“The responsibility for safeguarding the assets of the company and for the prevention and detection of fraud, error, and non-compliance with laws or regulations rests with the company’s directors. In accordance with auditing standards, we shall endeavor to plan our audit so that we have a reasonable expectation of detecting material misstatements in the financial statements or accounting records (including any material misstatements resulting from fraud, error, or non-compliance with laws or regulations). However, because any internal control structure, no matter how effective, cannot eliminate the possibility that errors or irregularities may occur and remain undetected and because we use selective testing in our audit, we cannot guarantee that errors or irregularities, if present, will be detected. Accordingly, our audit should not be relied upon to disclose all such material misstatements or frauds, errors, or instances of non-compliance as may exist. The best safeguard against irregularities and fraud is a sound system of internal control.”

The FC accused the auditors of running away from their responsibilities of exposing to the owners of the company fraudulent financial reporting and misappropriation of assets. To him, what is the purpose of audit when fraud and errors could not be discovered? He has threatened to discuss with the Board of Directors and insists that the engagement letter will not be signed until those sections are removed. You are a senior member of the audit team.

Required:

a. Outline the objectives of auditors in relation to fraud. (6 Marks)

b. Explain fraudulent financial reporting and misappropriation of assets. (7 Marks)

c. State the procedures auditors should perform to identify the risks of material misstatement due to fraud. (7 Marks)

Answer

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Tags: Audit Responsibilities, Corporate Governance, Engagement letter, Fraud Detection, Misappropriation, Risk Identification
Level: Level 3

Topic: Audit of Complex Entities
Series: NOV 2022

CSME – May 2023 – L1 – SA – Q2 – Risk Management and Corporate Strategy

Exploring risk management through identification, ranking, and stakeholder impacts.

Question

Every business venture has some measure of risk exposure that must be identified, measured, and adequately prepared for. Indeed, each business entity should have in place a good risk management strategy.

As a risk manager, clarify the following in ways that will be comprehensible to a greenhorn in business:

(a) Risk identification. (5 Marks)

(b) Importance of ranking risks. (3 Marks)

(c) Examine the impact of risks on categories of stakeholders. (12 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business Strategy, Operational Risks, Risk Identification, Risk Ranking, Stakeholder Impact
Level: Level 2

Topic: Risk Management and Corporate Strategy
Series: MAY 2023

CSME – May 2024 – L2 – SA – Q2 – Risk Management and Corporate Strategy

Evaluate risk management practices and responsibilities in an oil exploration company.

Question

An oil exploration company is planning to overhaul its risk management infrastructure. Prior to this time, there has been an upsurge in the number of oil spillages and fire outbreaks at its production facilities. Preliminary investigation narrowed the cause of these incidents to inadequate and ineffective risk identification system. You have been appointed to head the newly constituted risk committee, saddled with the responsibility of strengthening the company’s risk identification system.

Required:

a. Explain the meaning, purpose, and importance of risk identification.
(7 Marks)

b. Outline the risk management process.
(8 Marks)

c. Describe the responsibilities of a risk committee.
(5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Committee Responsibilities, Oil Exploration, Risk Identification, Risk Management Process, Safety Protocols
Level: Level 2

Topic: Risk Management and Corporate Strategy
Series: MAY 2024

CSME – Nov 2016 – L2 – Q4b – Risk Management and Corporate Strategy

Educate new board members on the role of the board and management in identifying and assessing risks.

Question

As the chairman of the board of directors of Health Pharmaceutical Company, you are required to educate newly elected members of the board on the roles of the board and management in identifying and assessing risks.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Board of Directors, Corporate Governance, Risk Assessment, Risk Identification
Level: Level 2

Topic: Risk Management and Corporate Strategy
Series: NOV 2016

CSME – Nov 2018 – L2 – Q3 – Risk Management and Corporate Strategy

Explain the processes of identifying, assessing, measuring, and prioritizing risks, and discuss the impact on stakeholders.

Question

Success and profit maximization in business are premised on factors that include the ability to identify, assess, and measure risks. As a risk manager, how would you explain the following to a group of prospective entrepreneurs in ways that would adequately equip them to deal with operational, business, and strategic risks?

a. Risk identification (4 Marks)
b. The impact of risk on any four stakeholders (4 Marks)
c. Assessing risks: impact and probability (4 Marks)
d. Measuring risks (4 Marks)
e. Prioritizing risks (4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Impact Probability, Measuring Risks, Prioritizing Risks, Risk Assessment, Risk Identification, Risk Management
Level: Level 2

Topic: Risk Management and Corporate Strategy
Series: NOV 2018

AA – Nov 2020 – L2 – Q1b – Planning and Approach for Audit and Assurance Engagements

State benefits of audit planning and explain what an auditor should do to secure them.

Question

Audit planning is a vital area of the audit primarily conducted at the beginning of an audit process to ensure that appropriate attention is devoted to important areas, potential risks are promptly identified, work is completed expeditiously, and work is properly coordinated.

Required:
i) State FIVE (5) benefits of audit planning.
(5 marks)

ii) Explain what an auditor should do to secure the benefits.
(10 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Coordination, Audit Planning, Auditor's Actions, Benefits of Planning, Risk Identification

Topic: Planning and Approach for Audit and Assurance Engagements
Series: NOV 2020

AAA – Nov 2022 – L3 – SB – Q2 – Audit of Complex Entities

Evaluate auditors' responsibilities in fraud detection, financial misreporting, and appropriate audit procedures to mitigate misstatements.

Question

The Financial Controller (FC) of Poki Limited made an observation on the draft engagement letter sent by the external auditors to the company, an extract of which is as stated below:

Required:

a. Outline the objectives of auditors in relation to fraud. (6 Marks)

b. Explain fraudulent financial reporting and misappropriation of assets. (7 Marks)

c. State the procedures auditors should perform to identify the risks of material misstatement due to fraud. (7 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Responsibilities, Corporate Governance, Engagement letter, Fraud Detection, Misappropriation, Risk Identification
Level: Level 3

Topic: Audit of Complex Entities
Series: NOV 2022

CSME – May 2023 – L1 – SA – Q2 – Risk Management and Corporate Strategy

Exploring risk management through identification, ranking, and stakeholder impacts.

Question

As a risk manager, clarify the following in ways that will be comprehensible to a greenhorn in business:

(a) Risk identification. (5 Marks)

(b) Importance of ranking risks. (3 Marks)

(c) Examine the impact of risks on categories of stakeholders. (12 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Business Strategy, Operational Risks, Risk Identification, Risk Ranking, Stakeholder Impact
Level: Level 2

Topic: Risk Management and Corporate Strategy
Series: MAY 2023

CSME – May 2024 – L2 – SA – Q2 – Risk Management and Corporate Strategy

Evaluate risk management practices and responsibilities in an oil exploration company.

Question

Required:

a. Explain the meaning, purpose, and importance of risk identification.
(7 Marks)

b. Outline the risk management process.
(8 Marks)

c. Describe the responsibilities of a risk committee.
(5 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Committee Responsibilities, Oil Exploration, Risk Identification, Risk Management Process, Safety Protocols
Level: Level 2

Topic: Risk Management and Corporate Strategy
Series: MAY 2024

CSME – Nov 2016 – L2 – Q4b – Risk Management and Corporate Strategy

Educate new board members on the role of the board and management in identifying and assessing risks.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Board of Directors, Corporate Governance, Risk Assessment, Risk Identification
Level: Level 2

Topic: Risk Management and Corporate Strategy
Series: NOV 2016

CSME – Nov 2018 – L2 – Q3 – Risk Management and Corporate Strategy

Explain the processes of identifying, assessing, measuring, and prioritizing risks, and discuss the impact on stakeholders.

Question

Answer

Find Related Questions by Tags, levels, etc.

Tags: Impact Probability, Measuring Risks, Prioritizing Risks, Risk Assessment, Risk Identification, Risk Management
Level: Level 2

Topic: Risk Management and Corporate Strategy
Series: NOV 2018

AA – Nov 2020 – L2 – Q1b – Planning and Approach for Audit and Assurance Engagements

State benefits of audit planning and explain what an auditor should do to secure them.

Question

Required:
i) State FIVE (5) benefits of audit planning.
(5 marks)

ii) Explain what an auditor should do to secure the benefits.
(10 marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Coordination, Audit Planning, Auditor's Actions, Benefits of Planning, Risk Identification

Topic: Planning and Approach for Audit and Assurance Engagements
Series: NOV 2020

Question Tag: Risk Identification

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AAA – Nov 2022 – L3 – SB – Q2 – Audit of Complex Entities

Evaluate auditors' responsibilities in fraud detection, financial misreporting, and appropriate audit procedures to mitigate misstatements.

CSME – May 2023 – L1 – SA – Q2 – Risk Management and Corporate Strategy

Exploring risk management through identification, ranking, and stakeholder impacts.

CSME – May 2024 – L2 – SA – Q2 – Risk Management and Corporate Strategy

Evaluate risk management practices and responsibilities in an oil exploration company.

CSME – Nov 2016 – L2 – Q4b – Risk Management and Corporate Strategy

Educate new board members on the role of the board and management in identifying and assessing risks.

CSME – Nov 2018 – L2 – Q3 – Risk Management and Corporate Strategy

Explain the processes of identifying, assessing, measuring, and prioritizing risks, and discuss the impact on stakeholders.

AA – Nov 2020 – L2 – Q1b – Planning and Approach for Audit and Assurance Engagements

State benefits of audit planning and explain what an auditor should do to secure them.

AAA – Nov 2022 – L3 – SB – Q2 – Audit of Complex Entities

Evaluate auditors' responsibilities in fraud detection, financial misreporting, and appropriate audit procedures to mitigate misstatements.

CSME – May 2023 – L1 – SA – Q2 – Risk Management and Corporate Strategy

Exploring risk management through identification, ranking, and stakeholder impacts.

CSME – May 2024 – L2 – SA – Q2 – Risk Management and Corporate Strategy

Evaluate risk management practices and responsibilities in an oil exploration company.

CSME – Nov 2016 – L2 – Q4b – Risk Management and Corporate Strategy

Educate new board members on the role of the board and management in identifying and assessing risks.

CSME – Nov 2018 – L2 – Q3 – Risk Management and Corporate Strategy

Explain the processes of identifying, assessing, measuring, and prioritizing risks, and discuss the impact on stakeholders.

AA – Nov 2020 – L2 – Q1b – Planning and Approach for Audit and Assurance Engagements

State benefits of audit planning and explain what an auditor should do to secure them.

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Question Tag: Risk Identification

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AAA – Nov 2022 – L3 – SB – Q2 – Audit of Complex Entities

Evaluate auditors' responsibilities in fraud detection, financial misreporting, and appropriate audit procedures to mitigate misstatements.

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CSME – May 2023 – L1 – SA – Q2 – Risk Management and Corporate Strategy

Exploring risk management through identification, ranking, and stakeholder impacts.

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CSME – May 2024 – L2 – SA – Q2 – Risk Management and Corporate Strategy

Evaluate risk management practices and responsibilities in an oil exploration company.

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CSME – Nov 2016 – L2 – Q4b – Risk Management and Corporate Strategy

Educate new board members on the role of the board and management in identifying and assessing risks.

You're reporting an error for "CSME – Nov 2016 – L2 – Q4b – Risk Management and Corporate Strategy"

CSME – Nov 2018 – L2 – Q3 – Risk Management and Corporate Strategy

Explain the processes of identifying, assessing, measuring, and prioritizing risks, and discuss the impact on stakeholders.

You're reporting an error for "CSME – Nov 2018 – L2 – Q3 – Risk Management and Corporate Strategy"

AA – Nov 2020 – L2 – Q1b – Planning and Approach for Audit and Assurance Engagements

State benefits of audit planning and explain what an auditor should do to secure them.

You're reporting an error for "AA – Nov 2020 – L2 – Q1b – Planning and Approach for Audit and Assurance Engagements"

AAA – Nov 2022 – L3 – SB – Q2 – Audit of Complex Entities

Evaluate auditors' responsibilities in fraud detection, financial misreporting, and appropriate audit procedures to mitigate misstatements.

You're reporting an error for "AAA – Nov 2022 – L3 – SB – Q2 – Audit of Complex Entities"

CSME – May 2023 – L1 – SA – Q2 – Risk Management and Corporate Strategy

Exploring risk management through identification, ranking, and stakeholder impacts.

You're reporting an error for "CSME – May 2023 – L1 – SA – Q2 – Risk Management and Corporate Strategy"

CSME – May 2024 – L2 – SA – Q2 – Risk Management and Corporate Strategy

Evaluate risk management practices and responsibilities in an oil exploration company.

You're reporting an error for "CSME – May 2024 – L2 – SA – Q2 – Risk Management and Corporate Strategy"

CSME – Nov 2016 – L2 – Q4b – Risk Management and Corporate Strategy

Educate new board members on the role of the board and management in identifying and assessing risks.

You're reporting an error for "CSME – Nov 2016 – L2 – Q4b – Risk Management and Corporate Strategy"

CSME – Nov 2018 – L2 – Q3 – Risk Management and Corporate Strategy

Explain the processes of identifying, assessing, measuring, and prioritizing risks, and discuss the impact on stakeholders.

You're reporting an error for "CSME – Nov 2018 – L2 – Q3 – Risk Management and Corporate Strategy"

AA – Nov 2020 – L2 – Q1b – Planning and Approach for Audit and Assurance Engagements

State benefits of audit planning and explain what an auditor should do to secure them.

You're reporting an error for "AA – Nov 2020 – L2 – Q1b – Planning and Approach for Audit and Assurance Engagements"

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