Question

Which of the following is not particularly indicative of a program’s exposure to risk:

1. Engagement of new independent auditors
2. Recently installed and untested computer systems
3. Past inefficiencies as revealed in previous audits
4. Ineffective administration

Answer 1

Correct Answer:

Option( 4) is correct statement that is ineffective administrative. Because having ineffective administration work will be completed slowly in the organization,but it will not indicate any exposure of risk.

Incorrect answers:

Option(1) is incorrect statement that is the engangement of new independent auditor is exposure to risk because the new auditor does not have good experience of auditing so it will affect the fairness of the financial statement.

Option(2) is incorrect answer because recently installed and untested computer system will chances of loosing the data or may corrupt important data, so there is a exposure of risk of  using such computer system.

Option(3) is incorrect answer because past inefficiencies revealed in previous audit may be existed into the current auditing report that may affect the fairness of the auditing report. so there is a exist ance of risk

So answer is option (4)