5) Match the following ethical issues to the risks Ethical issues A. One of the suppliers of the company uses child labour, the purchasing director is aware of this, but the supplier has good quality product at a low price B. The purchasing manager has created a false supplier and is paying the supplier regularly and the payment is going directly into his own bank account. The internal auditor who is his friend, detected the problem and quietly asked him to cease this and did not include it in his report. C. The directors of a company do not submit their own expenses even though they are greater than the total expenses for all the employees D. Main staff are forced to take sick leave because the company requires them to accept excessive workload. Choose the correct option A. A-II, B-III, C-I and D-III B. A-II, B-III, C-II, and D-IV C. A-IV, B-III, C-I and D-II D. A-II, B-IV, C-I and D-III 6) Use Table B to complete the sentences in Table A. Table A A. Authorising a joumal entry designed to manipulate an account balance is a form of .... B. Embezzlement of cash sales by a cashier would be classified as .... C. Events or conditions that indicate an incentive or pressure to commit fraud are referred to as ... D. The auditor should consider that there is a risk of fraudulent financial reporting, the risk would be considered to be a ....... Choose the correct option A. A-II, B-III, C-IV, and D-I B. A-I, B-III, C-IV, and D-II C. A-II, B-IV, C-III, and D-I D. A-III, B-IV, C-II, and D-I Risks 111. 1. The company will have a poor control environment 11. Reputation risk will increase III. Poor corporate social responsibility Table B MAC4867 IV. Financial reporting risk II. 1 IV. Incentive/pressure management override misappropriation of assets and employee fraud (2) fraud risk factors (2) 5