IIA Exam IIA-CFSA Topic 3 Question 66 Discussion

Actual exam question for IIA's IIA-CFSA exam

Question #: 66
Topic #: 3

Not all misstatements will be material enough to affect the fair presentation of the financial statement. A material misstatement is one that the auditors determine would change or influence the option of a reasonable person relying on the financial statements for information. Ultimately, auditors must exercise judgment to assess materiality based on the qualitative nature of the misstatements and their quantitative extent. Materiality is also based on auditors' assessment of control risk levels in the organization. The following factors may influence the auditors' assessment of control risk EXCEPT:

AManagement's awareness or lack of awareness of applicable laws and regulations

BClient policy regarding such matters as acceptable operating practices and codes of conduct

CAssignment of responsibility and delegation of authority to deal with such matters as
organizational goals and objectives, operating functions, and regulatory requirements

DNone of these

Show Suggested Answer

Suggested Answer: D

by Jerry at Oct 19, 2024, 09:29 AM

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Veta

10 days ago

Haha, the auditors must be having a tough time trying to figure out the right level of materiality. I bet they wish they had a magic 8-ball to help with that!

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Dannie

2 days ago

A) Management's awareness or lack of awareness of applicable laws and regulations

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Chaya

20 days ago

I think the key here is understanding that the question is asking for the factor that DOES NOT influence the auditors' assessment of control risk. The other options are all relevant considerations.

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Edna

3 days ago

B) Client policy regarding such matters as acceptable operating practices and codes of conduct

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Justine

10 days ago

A) Management's awareness or lack of awareness of applicable laws and regulations

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Donte

21 days ago

I agree with Myra. Management's awareness of laws and regulations should not influence the auditors' assessment of control risk levels.

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Arlette

23 days ago

The correct answer is D. None of these. The factors mentioned in A, B, and C are all related to the assessment of control risk, not the factors that are EXCLUDED from that assessment.

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Sherita

15 days ago

A) Management's awareness or lack of awareness of applicable laws and regulations

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Myra

24 days ago

I think the answer is A) Management's awareness or lack of awareness of applicable laws and regulations.

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