ACCA · Question 03 · Planning and Risk Assessment
SECTION A - CASE 1: NEUROCLOUD ANALYTICS CO
NeuroCloud Analytics Co is a fast-growing tech startup providing AI-driven data analytics to the healthcare sector. You are an audit manager at Turing & Co, planning the audit for the year ended 31 December 20X5. NeuroCloud is not a public interest entity (PIE).
During the planning phase, you note the following:
Question:
NeuroCloud's CEO also acting as the Chairman of the Board represents a deficiency in corporate governance. Which of the following best describes the audit risk associated with this deficiency?
Answer options:
It increases inherent risk because the company operates in a fast-paced technology sector.
It increases control risk due to a concentration of power and an increased risk of management override of controls.
It increases detection risk because the auditor will have to perform more substantive testing.
It has no impact on audit risk as corporate governance only applies to listed companies.
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