For each situation, identify the element(s) of the audit risk model (that is, audit risk, inherent risk, control risk, and detection risk) that is (are) most likely to be directly affected and the nature of the change in risk levels (increase or decrease) relative to a typical audit. Explain your reasoning.
a. A company provides all customers with the option to return unused goods within two weeks of the purchase. (1 mark)
b. In the current year, the company began performing credit checks for all new customers. The customers’ credit ratings were used to determine credit limits for the customers. (1 mark)
c. A client’s sales team is primarily compensated on a commission basis. Commissions are determined on a percentage-of-sales basis. (1 mark)
d. All cheques greater than a pre-determined limit require the signature of the controller and the chief financial officer. (1 mark)
e. In order to raise capital, in the current year the owner-manager of a business sold 20% of the common shares to a private-equity investor. The owner will remain actively involved in the business. The private-equity investor will not actively partake in the daily management of the business. (1 mark)
f. An auditor tests a control and observes several compliance deviations. (1 mark)
Welcome to one of the most trusted essay writing services with track record among students. We specialize in connecting students in need of high-quality essay writing help with skilled writers who can deliver just that. Explore the ratings of our essay writers and choose the one that best aligns with your requirements. When you rely on our online essay writing service, rest assured that you will receive a top-notch, plagiarism-free A-level paper. Our experienced professionals write each paper from scratch, carefully following your instructions. Request a paper from us and experience 100% originality.
Need Help Writing an Essay?
Tell us about your assignment and we will find the best writer for your paper.
Write My Essay For MeFrom stress to success – hire a pro essay writer!
