Discuss CIMA CIMAPRO19-P03-1 Exam Topic 2 Question 108

SDF is a quoted company. Which of the following matters should normally be dealt with by SDF's audit committee?

AThe external auditor has requested a higher fee than normal for the forthcoming financial year because new legislation will require additional audit work.

BThe Head of Internal Audit is concerned that a recent internal audit investigation may have revealed serious compliance failures.

CThe external auditor is concerned that an accounting policy selected by the Finance Director does not comply with the spirit of the relevant accounting standard.

DThe external auditor has identified a material error, due to a clear miscalculation, in the draft financial statements.

EThe Finance Director will be retiring within the next year and a replacement will have to be found.

Suggested Answer: A, B, C

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12 comments · newest first

Jackie 2 months ago

C stands out for me. Policies should align with standards.

Alease 2 months ago

Definitely B too. Compliance failures can be serious.

Linwood 2 months ago

I think A is important. Higher fees mean more work, right?

Haydee 3 months ago

Higher fees for more work? Sounds fishy to me!

Blondell 3 months ago

Wait, E isn't really an audit issue, right?

Corazon 3 months ago

D is a big deal, they can't ignore that error.

Osvaldo 3 months ago

I think C is also crucial, compliance is key!

Lai 3 months ago

Definitely A and B should be on the committee's radar.

Winfred 3 months ago

I recall that material errors in financial statements, like in option D, are critical for the audit committee to review, but I’m confused about whether they would also deal with the Finance Director's retirement in option E.

Freida 4 months ago

I practiced a similar question where the audit committee had to deal with accounting policy issues, so I think option C is relevant too, but I’m not 100% certain.

Kimberlie 4 months ago

I'm not entirely sure, but I feel like option B about the internal audit concerns might also be something the audit committee should address, especially if it involves compliance failures.

Valentin 4 months ago

I remember discussing the role of the audit committee in class, and I think they should definitely handle issues related to external auditors, like the fee increase in option A.

CIMAPRO19-P03-1 Exam - Topic 2 Question 108 Discussion